Taxation - Malta
Interest
A resident investor may opt to receive his interest payment gross or else net of 15% Final Withholding Tax (FWT).
Should the investor opt to receive gross interest payments, he would have to declare receipt of interest payments on the annual tax form. However, should the investor opt to received interest payments net of FWT, then there would not be any need for the investor to declare such interest receipt of interest payments on the annual tax form.
Should an investor be purchasing any bond/stock at IPO or else on the secondary market, he should indicate his preferred tax option in respect of such holdings in order to ensure that the correct tax treatment is applied.
Non-resident investors are exempt from FWT unless the relevant income is repatriated to Malta.
In accordance with the Savings Directive, Maltese Tax Authorities may exchange information with other EU Member States’ Tax Authorities in respect of interest/income payments made by Maltese payers.
Dividends
Shareholders receive such payments net of any corporate tax payable, usually 35%. The rate of tax to be deducted may vary according to whether the dividends due are paid out from taxable profit or not. If dividends are paid out of non-taxable profits, then no tax would be applicable on such payments.