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Título

NEWCO © All rights reserved 2014 We know how

Tax Planning Opportunities

Contents

1.  Malta

2.  Tax Regime

3.  Opportunities

4.  NEWCO

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1. Malta

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Malta

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Malta

Business in Malta

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Malta

Companies in Malta

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1. Malta Tax regime

Tax Regime

Tax regime

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Tax Regime

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Effective tax rates | active income

Tax Regime

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Effective tax rates | passive income

Tax Regime

Taxation exemption of dividends and capital gains of participating holding (PH): a)  The shareholding has a 10% holding and a right to at least 10% of 2 of the

following: ü  Voting rights ü  Right to profits available for distribution ü  Right to the assets available for distributed on liquidation; or

b)  The shareholding has a value of, at least, € 1,164 M on purchase date and has been held for a continuous period of, at least, 183 days; or

c)  Malta HoldCo has an option to buy the entirety of the outstanding shares of the foreign company; or

d)  Malta HoldCo has powers to appoint one member of the board of directors of the subsidiary; or

e)  Malta HoldCo has a right of first refusal in the case of sale, redemption or cancellation of the outstanding subsidiary’s shares; or

f)  Malta HoldCo holds a shareholding for the development of its own business and not only as stock for resale purposes.

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Participation Exemption

Tax Regime

Only in the case of dividends, the non-resident participated company also has to comply with at least one of the following anti-avoidance conditions:

a)  to be resident or incorporated in the EU; or b)  to be subject to, at least, a 15% foreign tax; or c)  more than 50% of its income does not result from passive interest or royalties If none of these 3 conditions is met, the following conditions have to be cumulatively met: a)  the holding by Malta HoldCo is not a portfolio investment and the non-resident

participated company does not have more than 50% of its income derived from portfolio investment; and

b)  the non-resident participated company or its passive interest and royalties have been subject to, at least, 5% foreign tax.

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Participation Exemption

Tax Regime

Malta caters for three mechanisms to eliminate double taxation applicable to income that has been taxed at source abroad:

Application of the double taxation treaties

Unilateral tax relief

Flat rate foreign tax credit (FRFTC) of 25%

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Double tax relief mechanisms

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2

3

Tax Regime

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Double tax relief mechanisms

Treaty Unilateral credit FRFTC

Company 1- Gross income 100 100 125

2- Tax @35% 35 35 43,75

3- Tax paid abroad or FRFTC 101 152 25

4- Tax in Malta (3-2) 25 20 18,753

Shareholder

5 – Refund rate 2/3 2/3 2/3

6 – Refund (5x2, 5x4 in FRFTC) 23,33 204 12,55

7- Tax burden of the structure in Malta ( (4-6) 1,67% 0% 6,25%

|1| Example with foreign withholding tax rate of 10%

|2| Example with foreign withholding tax rate of 15%

|3| The deduction may not be greater than 85% of the tax to be paid in Malta before the FRFTC deduction but after the application of other tax credits

|4| Limited to 20 because the refund may not be greater than the tax paid by the company

|5| In the case of FRFTC, the tax refund is calculated based on the tax paid by the company on the profits included in the dividends subject to distribution after the deduction of the credit related to the application of the FRFTC

Tax Regime

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Double taxation treaties

Tax Regime

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Foreign companies with effective management in Malta

Entities Taxation

Resident and domiciled Worldwide income

Resident or domiciled Income obtained in Malta or obtained abroad (excluding capital gains) and remitted to Malta

Rule

Domicile Head-office

Residence Head-office or effective management

Foreign companies (Cyprus or other) with effective management in Malta are taxed on a territorial basis

Tax Regime

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Personal income taxation

Regime Taxation

General regime for resident and domiciled individuals

Progressive tax rate up to 35%

Regime for high net worth individuals

Income obtained abroad and remitted to Malta is taxed at a flat rate of 15%

Regime to attract highly qualified persons

Employment income in the financial services or e-gaming sectors is taxed at a flat rate of 15%

Third-country nationals who qualify under the Global Residence Programme (GRP) rules

Foreign source income remitted to Malta is taxed at a flat rate of 15%

Tax Regime

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Other advantages

Malta’s tax regime offers many other advantages: •  Withholding tax exemption on the payment of royalties, interest, dividends or proceeds of liquidation

•  Exemption of Capital Gains tax

•  Flexible and straightforward anti-avoidance rules

•  Advance rulings

•  Possibility to redomicile companies from and to Malta

•  Tax exemption on qualified intellectual property

Tax Regime

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Other advantages

Malta’s tax regime offers many other advantages: •  The share capital of the companies can be denominated in any convertible

currency

•  Flexibility in the choice of the tax year

•  Malta accounting standards based on IFRS

•  Stamp duty exemption

•  Group tax relief

•  Malta has no capital tax or wealth tax

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1. Malta Opportunities

Opportunities

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Trading Operations

|1| Corporate income tax

Opportunities

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Holding

Opportunities

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Intellectual property or financing

|1| Income exempt in Malta |2| Taxed at 35% with 2/3 refunded and double tax relief

|3| Taxed at 35% with 6/7 refunded and double tax relief |4| Interest and royalties are considered active when they are a result of the company’s business activity

Opportunities

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Financial leasing of yachts and aircrafts

Opportunities

ü  Shipping and Aviation

ü  Short-term Yacht chartering

ü  Trusts and Foundations

ü  E-gaming

ü  Investment funds

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Other Opportunities

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NEWCO

•  Full service corporate service provider in Malta and Madeira

•  23 years of experience

•  Strategic values: Know-how, customer satisfaction, integrity, service

excellence and innovation

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NEWCO

NEWCO ensures that its clients receive all the necessary support for effectively establishing their companies in Malta, namely with:

•  Company incorporation and registration

•  Supply of the respective registered office and related services, companies’ management and administration

•  Tax compliance, legal, financial, tax and accounting assistance, consultancy and assistance in the creation of investment projects

•  Services with the purpose to facilitate the setting-up of companies in Malta (offices, equipment, human resources…)

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NEWCO

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89% of clients

Consider that NEWCO has a wide knowledge of all issues related to their jurisdiction

87% of clients

Recognize that NEWCO offers leading services in its sector of activity

93% of clients

State that they are highly likely to recommending our company to their peers and partners

“Honest and Professional.” Giuseppe Luongo President YOUTHSTREAM GROUP Monaco

“I consider the understanding of customer needs and willingness to accommodate and find appropriate solutions the key differentiator of NEWCO service.”

Luís Franco Vice-President SurveyMonkey Palo Alto, EUA

http://www.newco.pro/en/library

Learn more about these and other topics about Malta in our library

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Título

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THANK YOU. Frederico Gouveia e Silva frederico.silva@newco.pro skype frederico.silva.newco M. (+351) 967 819 308

www.newco.pro

Follow our Blog in www.newco.pro/blog

Jorge Veiga França jvf@newco.pro Skype: jvf.newco M. (+351) 965 235 692