The main goal for a business is to become a success and make profits. The financial aspect of a business is very important, and success in this area can be achieved by managing well many aspects of the business, from having control of monthly budgets, good management of money, paying debts on time, having a financial plan in place, and keeping accounting records up to date so you are always aware of your financial situation when you need to make important business decisions.

Tax also plays an important role in all this as it is an inevitable expense to any business. Although it is obligatory to be paid, it does not mean that an entity must be crippled by taxation. This is where a tax advisor comes in the picture to guide businesses on how to benefit from tax saving opportunities by taking the best advantage available locally.  One must keep in mind the various tax incentives available to local companies by Malta Enterprise and other entities.

Furthermore, foreign shareholders can benefit from an advantageous tax refund system in place to be claimed on income allocated to the Maltese Taxed Account and Foreign Income Account. To note is that such refunds can be claimed by non-residents shareholders. This tax system has been in place since many years, and it favours Malta as a country for foreigners who want to built their business in Malta. All this while still being fully compliant to law.

Any company incorporated in Malta with foreign shareholding is entitled to apply for a tax refund. This means that although companies are taxed at a rate of 35%, they are entitled to claim tax credits. This can potentially result in an effective tax rate between 0 – 10%, and it depends on the the type of income the company generates. It is to be noted that this system is fully compliant with EU and international standards as it has been approved by the European Union and the Organisation for Economic Co-operation and Development (OECD).

The taxation team at Fairwinds Management can assist you on any tax-related services such as international tax services, registration of shareholders for the purpose of tax refunds, and compilation of companies’ tax computation as required by the income tax act. Tax advisory services are not strictly related to tax optimization strategies but are also related to the preparation of self-assessments, known as Income Tax Returns, registration of shareholders for the purposes of tax refunds, preparation of dividend warrants, and more.

If your business requires tax advisory services, you can get in touch with one of our Directors, Ms Joceline Caruana M.Acc, MIA, Cert.Tax, CPA, accountant and tax specialist, on jcaruana@fairwindsmanagement.net.

Charlene Sciberras