Maltese legislation on royalties
offers various tax exemptions for individuals or companies
working in the field of research and development, for patents or copyright material. Our agents in company formation
can present to you the legal status on royalties
when you will set up your business in Malta
Maltese Income Tax Act – Royalties Exemptions
If you are seeking for company registration in Malta in the field of research and development
, you should know that the Maltese government has recently introduced new laws to sustain, protect and encourage researchers to register their intellectual property.
Under the Income Tax Law, royalties represent taxable income for Maltese residents, as well for non-Maltese residents (real persons or companies) as long as the royalties are received in Malta; starting with January 2010, the law added a new provision, stating that any royalties coming from trade or business are exempted of the income tax, regardless if the registration of the patent was done in Malta or in any other country.
A patent registered in a different place than Malta can be tax exempted if it falls in the following categories:
• fundamental research;
• industrial research;
• experimental development.
Withholding Tax on Royalties
Malta imposes a rate of maximum 10% withholding tax on royalties
, but royalties can also be tax-free, as a part of the double taxation treaties signed by Malta
with several states (associated companies that belong to the European Union’s space are exempted from the payment of the withholding tax); if you want to set up a company in Malta
and you need advice on this subject, our agents in company formation
can offer you relevant information.
Tax Exemption on Copyright Royalties
An entrepreneur interested in company registration in Malta
should also know that, from May 2012, Maltese Law
has extended the tax exemptions on royalties to copyright material, under the Article 12 of Income Tax Act
The copyright contains a larger area of intellectual property, such as:
• artistic works;
• audiovisual works;
• literary works;
• musical works.
The Copyright Act specifies that intellectual property refers also to art – sculptures, architecture, lithographs, maps, scientific works, photography, buildings and craftsmanship.