Double Taxation Relief In Malta: An Overview

Double Taxation

Double taxation occurs when tax is levied on the same income in two different points, which may also be in a cross-border context. This happens, for example, when tax is levied in the country from which the income is sourced and the country of residence of the taxpayer. Since double taxation may discourage effective cross-border investment and trade, Malta provides relief through either crediting foreign taxes or exempting income altogether.

One should also note that Malta also has a full imputation corporate tax system: resident companies pay 35%, but dividend recipients receive a tax credit for the tax paid, meaning that profits distributed to shareholders are effectively taxed only once.