In view of the fact that Malta operates a full imputation system, it does not withhold any tax on the outbound payment of dividends to nonresidents.
There is, however, a 15 percent withholding tax where a dividend is paid out of an untaxed account to either:
- a resident individual (resident companies are specifically excluded);
- an EU/EEA individual who has declared that at least 90 percent of worldwide income is derived from Malta; or
- a nonresident company that is directly or indirectly owned and controlled by, or acts on behalf of, a Maltese domiciled and ordinarily-resident individual.
Planning Point: It is unclear whether a withholding tax applicable to a nonresident company solely when owned and controlled by, or acting on behalf of, a Maltese domiciled and ordinarily-resident individual may be in breach of the EU law principle of nondiscrimination