Relief at source – eligibility, documentation, deadlines – Maltese debt securities (CBF)

03.04.2024

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 Clearstream Banking 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 Clearstream Banking:

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 Clearstream Banking, the respective client must disclose to Clearstream Banking 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 Clearstream Banking, 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 Clearstream Banking

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.