Malta: Branch profits exemption and expanded royalty exemption

On the 17th May, the Maltese parliament approved tax amendments which had been outlined during the Budget for 2013. The new rules have been applied retrospectively and relate to the tax periods commencing on or after 1 January 2012 and relate to the following:

Branch profits

Malta’s participation exemption regime has been broadened to include profits and gains derived by a Maltese company that are attributable to:

  • a permanent establishment situated outside Malta, or
  • the transfer of such a PE

These amendments were done to ensure compliance with EU law.

Trademark Royalties

Malta provides for a full exemption for profits from royalties derived from registered patents and copyrights. The amendments extend the exemption to royalties derived from qualifying trademarks. Detailed rules prescribing the terms and conditions necessary for the application of the exemption to copyrights and trademark royalties are expected to be published shortly.

For further details on the above contact Nicky Gouder