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Refund of tax on
foreign incooome account
A
non-resident shareholder receiving a dividend payment from a Maltese company
out of the company's Foreign Income Account is entitled to a refund of
tax paid by the company in respect of the income. The repayment regime
recognises the exposure to double or even triple taxation of overseas income
and seeks to mitigate the effect of such layers of legislation on international
business.
In
most cases, the refund will be two-thirds of the Maltese tax paid by the
company on profits allocated to its Foreign Income Account. However, where
the dividend is paid out of income received by the company in respect of
"participating holdings" (see 3.3 below) the non-resident shareholder is
entitled to a full refund.
The
repayment regime also includes dividends received by Maltese companies
which are 100% owned by non-resident shareholders. Such a repayment
will not be taxed further in the hands of the Maltese company.
To
avoid cash flow difficulties, any provisional tax due on the profits allocated
to the Foreign Income Account will not be collected until the earlier of
the date such profits are distributed or 18 months after the end of tile
accounting period. |
Malta
as a Tax Friendly Jurisdiction
