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As discussed in a previous post, the new Italian online gaming license regime will allow operators to locate their company and their servers in any country of the European Economic Area. This represents a considerable advantage for gaming operators that will be able to set up their company in countries with a tax regime much more favorable than Italy like Malta. In this context, a friend of GamingTechLAW, Ian Gauci, a partner in the Maltese law firm Gatt Tufigno Gauci, Advocates, was so kind in providing the post below that gives some insights on the reasons why Malta is a favorable country for gaming operators. Enjoy the article!
As the first EU country to formally regulate iGaming, Malta has established itself as a leader in the gaming industry, attracting some of the major players to the island’s shores. The success of the iGaming industry is not solely attributable to one factor but it is widely acknowledged that apart from the gaming legislation, a number of unique characteristics as explained briefly in this post have contributed to this accomplishment. One of the attractions that Malta offers to investors is undoubtedly the favorable taxation regime applicable to Maltese registered companies. Although Maltese companies are taxed at a flat rate of 35% on worldwide income, various tax refunds are available at the level of shareholders. Upon a distribution of a dividend, shareholders are entitled to:
- a refund of 6/7ths of the total tax paid, including any foreign tax paid;
- a refund of 5/7ths in case of profits derived from passive interests or royalties; and
- a refund of 2/3rds of the total tax paid if relief from double taxation is claimed.
Malta adopts the full imputation system which means that dividends will not be taxed again in the hands the shareholders. A wide range of double taxation treaties (including a double taxation treaty with Italy) are in force. Furthermore there is neither any withholding tax imposed on dividends, nor any CFC or thin capitalization rules are applicable. A favorable tax system along with excellent infrastructure, serious regulators, state of the art infrastructure, an extensive treaty network, highly qualified professionals who are fluent in a number of languages and a business friendly atmosphere have raised Malta’s reputation beyond its relative small size, truly placing itself as a jewel in the Mediterranean.
Do you want to know more details on the above? Feel free to contact Ian Gauci or me, Giulio Coraggio.
Do you want to know more details on the above? Feel free to contact Ian Gauci or me, Giulio Coraggio.
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