Malta is proving to be one of the EU’s best regulated and most tax efficient jurisdictions for cross-border aircraft finance and related operations and for the aviation business in general. This is a result of the combination of recent legislative measures that include Malta’s adoption of the Cape Town Convention (CTC), the creation of dynamic aircraft and mortgage register, a comprehensive trust legislative framework and a number of tax measures and incentives aimed at ensuring attractive tax results and tax neutrality for international operators.
Malta’s success as a jurisdiction of choice for tax-driven structures is mainly attributed to a full imputation system of taxation coupled with tax refunds and exemptions. Other measures that make Malta a competitive base for cross-border operations include:
- participation exemption regime;
- absence of withholding tax on outbound dividends;
- exemption on interest and royalties derived by non-residents;
- extensive double taxation treaty network and other forms of double taxation relief;
- absence of thin capitalization, CFC and express transfer pricing rules;
- advance revenue rulings on international tax issues.