Malta’s standard tax rate for companies is 35% and dividends are taxed accordingly. However, subject to certain terms and conditions, a non-resident ultimate beneficial owner (UBO) can apply for a tax refund of 6/7 of the amounts paid effectively reducing the net tax payable to 5%. In case of Holding Companies (having non-resident UBOs) receiving such dividends, these can similarly apply for such refunds through fiscal consolidation. 

In such case only the net 5% tax is paid, hence without the need to pay the full 35% and await the receipt of the refunds. In the case of passive income, the amount of tax refund shall be of 5/7 of amounts paid. Naturally terms and conditions will apply according to Maltese law, and there may also be circumstances which may favour the company differently such as in cases of foreign income and/or double taxation treaties.