Malta expands the scope of Royalties exemption and Participation exemption

Benjamin Griscti  -  21/September/2012

Royalty Exemption

Prior to this amendment, Malta only exempted royalties derived from registered patents for qualifying inventions. Now, the scope of this exemption has been broadened to also exempt royalties derived from qualifying copyrights.
Whereas royalties derived from sources other than patents or copyrights remain taxable in Malta, these are generally only subject to an effective corporate tax rate of 5%.

Participation Exemption

For the time being Malta’s participation exemption regime has only applied in respect of limited liability companies and foreign partnerships that are similar to Maltese limited partnerships. The scope has now been clarified to also incorporate foreign collective vehicles which provide limited liability protection to investors. Therefore, income derived by a Maltese company from its holding in such type of foreign collective vehicle is exempt.

For any queries about the aforementioned issue, kindly contact Mr Joseph Gauci (Managing Partner) or Mr Benjamin Griscti (Senior Advisor)

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