Some attributes of Malta as an interesting and emerging tax planning jurisdiction

Since Malta joined the EU in 2004, it has emerged as an attractive jurisdiction for establishing international corporate holding structures, whether they be required for multinational corporate groups or for managing the wealth of high-net-worth individuals. The attributes that make Malta a suitable jurisdiction for these purposes may not always be obvious. Andrew Knight, Partner in Maitland's legal advisory division in Paris, highlights some of them.

The principal advantage of Malta is to be found in its tax system that facilitates a tax-efficient flow of international revenues. This advantage was significantly enhanced when the negotiations leading up to Malta's membership of the EU in 2004 resulted in the introduction of a relatively wide-ranging exemption mechanism in addition to the pre-existing imputation system and tax refund mechanism.

The result has been the creation of a tax regime which has some unique attributes. These would, for example, allow revenue earned by offshore tax-exempt corporate entities to be routed to shareholders resident in the EU without any tax cost. They would also allow for the flows of revenue earned in an onshore jurisdiction to be distributed to an offshore parent without withholding tax.

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