Tax in Malta: An Interview with Dr Timothy Zammit
RSM Malta is a professional services and advisory firm with a strong team of professionals with decades of experience assisting clients from a range of industries. The firm’s goal is to be the firm of choice to leading businesses in Malta, offering an excellent and personalised service. To hear about Tax in Malta, this month […]
RSM Malta is a professional services and advisory firm with a strong team of professionals with decades of experience assisting clients from a range of industries. The firm’s goal is to be the firm of choice to leading businesses in Malta, offering an excellent and personalised service.
To hear about Tax in Malta, this month Finance Monthly spoke with Dr Timothy Zammit, who has recently been made partner at RSM Malta within the tax and corporate services unit, after having joined the firm in 2010 as a tax lawyer. Together with a team of professionals, Timothy is responsible for assisting clients with their corporate and tax advisory needs.
As a newly appointed Partner at RSM Malta in the tax advisory and corporate services, what are the key services that you assist clients with?
Together with fellow tax partner, George Gregory, and a team of financial and legal professionals, I assist clients with enhancing their fiscal efficiencies through the setting up of companies, special purpose vehicles and corporate restructuring while providing transactional support in acquisitions, mergers and divisions, together with business succession planning while ensuring clients’ full compliance with their tax and corporate obligations. I also advise clients on matters including personal taxation, benefitting from one of the tax residence programmes, taking up residency in Malta and applying for Maltese citizenship.
How complex is the tax system in Malta?
Malta’s tax system is fully compliant with EU Directives and also includes a number of elements that are attractive to both businesses and individuals. Malta is the only EU Member State that has maintained the full imputation system while imposing tax according to the nature of the income’s source. A cornerstone of Malta’s tax system is that universal taxing rights are claimed on persons (both individuals and companies) that are both resident and domiciled in Malta. Malta has also been moving towards a system based on final taxation at source, primarily on property transactions, in the past years. It is the interoperation of these complexities that makes Malta such an attractive option.
In your opinion, are there any unique advantages of conducting business in Malta from a tax perspective?
While Malta’s corporate tax rate is one of the highest in Europe at 35%, at a time where there is a trend of lowering corporate tax rates, the full imputation system offers a business-friendly environment, while eliminating economic double taxation. Malta’s tax system provides shareholders the right to credit the tax paid by the company to their personal tax liability. Where the shareholders’ tax rate is lower than the 35% corporate tax rate, they may apply for a refund between their applicable tax rate and that of the company. This is available to both residents and non-residents, offering a favourable and business-friendly tax environment.
Malta not only offers an attractive tax regime. The ‘can do’ attitude that is adopted by the authorities in regulating and doing business in general, coupled with the Mediterranean lifestyle gives investors a very appealing option.
How do you help your clients mitigate their tax liability whilst remaining fully compliant with tax laws?
When dealing with cross border businesses, an international tax advisor can never only look at the situation in one jurisdiction – as any solution is only a solution if it works in all the right jurisdictions. It is through the availability of reliable professionals globally with the right experience and background being part of RSM, that we may truly assist clients ensuring that they are fully compliant.
You’ve recently been made Partner – what does this mean to you? How will your current responsibilities change? What are the goals that you’re arriving with?
Being made Partner in a firm with 170 professionals is a strong vote of confidence by my fellow Partners that gives me renewed enthusiasm to continue contributing to the firm’s growth and solidifying RSM’s position as the mid-tier firm of choice. My role as Partner comes at a challenging time where the industry is facing a multitude of challenges, ranging from changes to tax systems globally in the light of the financial crisis, BEPS and the trend of full disclosure and exchange of information to the industry disruption that will be caused by technologies such as the Blockchain and Artificial Intelligence in the coming years. The challenge is to be able to help identify and adopt the right approach that will guarantee our clients’ continued future success while ensuring that they are fully compliant with their obligations in all the jurisdictions that they operate.
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