Corporate tax in Malta - Full Imputation System


  • Definition: shareholders receive full credit for any tax paid by the company on profits distributed as dividends, thereby avoiding double taxation.
  • Excess imputation tax credits are refundable where the shareholder is liable to tax in Malta on the dividend at a rate which is lower than the company rate of tax (ie. 35%).
  • Tax due by company (Advanced Company Income Tax) on the earlier of:

-18 months from year end (subject to certain conditions), or
-within stipulated time frame following the payment of a dividend.

Full Imputation System – Example

TAXATION OF COMPANY XYZ LTD.
Chargeable Income € 100
Tax at 35% € 35
Profit after taxation available for distribution € 65
TAXATION OF THE SHAREHOLDER RECEIVING DIVIDEND
Gross Dividend € 100
Tax deducted by XYZ Ltd. € 35
Net Dividend € 65