General information – types of securities, deadlines, other market specifics – Malta (CEU)
Reference
Withholding tax services
Relief at source and reclaim of withholding tax are not currently available through Clearstream.
Debt securities | Holding restriction? | Withholding | Relief at | Quick | Standard |
No | 15% a | ||||
Non-resident residents (0%) | Yes | No | No | ||
Residents of Malta – individuals (15% a or 0%) | Yes | No | No | ||
Maltese residents – legal entities other than funds (15% a or 0%) | Yes | No | No | ||
Maltese residents – legal entities – prescribed investment funds (10%) | Yes | No | No | ||
Maltese residents – legal entities – non-prescribed investment funds (0%) | Yes | No | No | ||
Undisclosed (15%) | No | No | No | ||
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, the respective client must disclose to Clearstream the details of the beneficiary resident in Malta since such disclosure is required by the local Central Security Depository for reporting purposes.
Equities | Holding restriction? | Withholding | Relief at | Quick | Standard |
No | 15/35%a | ||||
All | No | No | No | ||
a. Malta operates a full imputation system. By way of example, let's assume that a Malta company has profits before tax of €100. The Malta company is taxed on these profits at a rate of 35% (i.e. tax of €35, profits after tax of €65). If the €65 are allocated to the Malta company's Maltese taxed account, immovable property account or foreign income account, then, upon a distribution of taxed profits (€65) by the Malta company, the dividend will, for tax purposes, be deemed to be a dividend of €100, and tax of 35% (€35) will be shown as deducted. This is not withholding tax but the operation of the full imputation system.
In practice - it may appear based on credit advice that dividends are received net of 35% WHT. However, this 35% is not a WHT but the result of Malta's full imputation system whereby dividends are distributed from the issuer's Maltese taxed account after being subject to 35% Maltese corporate income tax.
In the very rare event that the Maltese company would distribute dividends out of its untaxed account then such dividends would be subject to a 15% Final Withholding Tax (Art. 62 of the Income Tax Act (Cap. 123 of the Laws of Malta), refers).
Types of securities
The eligible securities issued in Malta are as follows:
- Government bonds;
- Treasury bills;
- Domestic corporate bonds;
- Ordinary shares.
Capital gains tax
There is no capital gains tax withheld through Clearstream on securities held in Clearstream. Malta currently does not impose a tax on capital gains.
Stamp duty
There is no stamp duty withheld through Clearstream on securities held in Clearstream.
