Relief at source – eligibility, documentation, deadlines – Maltese debt securities
Interest payments distributed from Maltese debt securities are subject to 15% withholding tax.
Automatic relief at source from withholding tax on Maltese debt securities is available through LuxCSD for the interest payments distributed prior to 1 March 2024, as interest is always paid gross by default, because it is assumed that clients do not hold Maltese securities on behalf of Maltese resident beneficial owners.
For the interest payments distributed from Maltese debt securities from 1 March 2024 and the following default withholding tax rates are applied in LuxCSD:
Income distribution type | Default withholding tax rate |
Corporate bonds – interest | 15% |
Corporate bonds – redemption | 0% |
Government bonds – interest | 15% |
Government bonds – redemption | 0% |
Eligible beneficial owners
The following beneficial owners are eligible to obtain relief at source from withholding tax on interest payments on Maltese debt securities:
Beneficial owner type | Withholding tax |
Non-residents – all | 0% |
Maltese residents – individuals | 15% a or 0% |
Maltese residents – legal entities (other than funds) | 15% a or 0% |
Maltese residents – legal entities – prescribed investment funds | 10% |
Maltese residents – legal entities – non-prescribed investment funds | 0% |
Undisclosed | 15% |
a. Even if clients hold Maltese debt securities on behalf of a Maltese tax resident beneficial owner that is subject to the maximum default withholding tax rate of 15% through LuxCSD, the respective client must disclose to LuxCSD the details of the beneficiary resident in Malta since such disclosure is required by the local Central Security Depository for reporting purposes.
Documentation requirements
For the purpose of obtaining relief or exemption at source on behalf of eligible beneficial owners, clients must submit to LuxCSD, before the relevant deadlines, the following documentation for all beneficial owner types:
- One-Time Certificate for Maltese Debt Securities; and
- Per-payment instruction (if applicable).
Note: All clients must ensure that the tax instructions provided relate to settled positions only, without consideration of pending trades.
Deadlines
The deadlines for the submission of the documentation to obtain a relief at source of withholding tax or to provide the required disclosure for fully taxed Maltese tax residents on interest payments from Maltese debt securities are as follows:
Deadline for receipt by LuxCSD | |
Document | Relief at source |
One-Time Certificate for Maltese Debt Securities | Five business days prior to the first income record date, by 10:00 CET. |
Per-payment instruction | One business day prior to each income record date, by 10:00 CET. |