Malta operates a full imputation system where income tax paid by companies is fully credited to shareholders receiving dividends, eliminating double economic taxation. While the headline corporate tax rate is 35%, shareholders are entitled to refunds based on the source of income. This typically results in effective net tax rates of around 10%, 5%, or even 0%, making Malta highly attractive for international tax planning.

Dividends received from companies registered in Malta, as well as all profits derived from sales by their subsidiaries, are fully exempt from corporate tax as long as they are paid as dividends to shareholders. In certain cases, such income generated is not subject to tax obligations, meaning it does not need to be reported or taxed.

Following its accession to the European Union in 2004, Malta introduced a range of new incentives. As a result, an increasing number of foreign individuals are registering companies in Malta. Foreign investors or entities with foreign tax residency rights can greatly benefit from Malta's tax regime. Additionally, Malta is one of the EU member states with the lowest tax rates for foreign shareholders.