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A Tax Advisors Point Of View - Is Malta A Viable Brexit Solution?

Contributed by Welcome Center Malta
20 December, 2018

With a clear no from the EU to May on renegotiating a Brexit deal, and the Irish "backstop" handcuffing the UK to EU's customs union, there has never been more uncertainty about Britain's future of independent trade deals. Our tax advisors will look at in this article if Malta is a viable solution for British companies.

The effects of Brexit on firms in the UK has according to a survey, conducted by Reuters, a potential of affecting 10,000 jobs during the first wave. Over 100 top financial firms with an international focus were asked about their future plans. Some are still hopeful of "soft" Brexit, but over half of the companies will shift several jobs out of the United Kingdom.

British companies may consider establishing their Funds in another EU jurisdiction as well as consider company relocation. Its favourable tax regime (with over 70 double tax treaties), close ties to the UK both historically and in present day matters. The international workforce on the Island has a fluent use of the English language as well. Furthermore, a successful financial services industry position Malta as an ideal location to provide a seamless transition from an operational aspect whilst continuing to have access to the EU market. Besides offering cost-effective set-up and operational costs, the Malta corporate tax system allows companies to benefit from the full imputation system, as well as a tax refund system when a company's shareholders are not resident in Malta. Under the Tax Refund System, companies can benefit from up to a 6/7ths refund of the tax paid on distributed profits, effectively reducing the tax paid to 5% from the standard corporate tax rate of 35%. Irrespective of the uncertainty of Brexit, the final deal will without doubts impact UK businesses. Our tax advisors in Malta are ready to handle any Brexit outcome and are happy to explore various tailored options to safeguard UK businesses through a smooth relocation to Malta.


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