Netherlands vs Malta: the tax refund system compared

Where Malta wins

A Maltese company pays 35% tax to the Maltese tax authority (Malta Tax and Customs Administration). After a dividend, the shareholder claims six sevenths of that tax back. Malta then keeps five cents of every euro of trading profit. For passive interest and royalties, the refund is five sevenths, so the rate is 10%. A refund of two thirds applies when a foreign tax credit was claimed. Under the fiscal unit regime, a group settles the net amount directly. The group then saves the time between paying the tax and getting the refund. Malta also has a participation exemption for qualifying holdings, more than seventy double tax treaties and VAT at 18%. English is an official language next to Maltese. International lawyers can read the company law in the original language.

For the global minimum tax for large groups (Pillar Two), Malta used the exception for small member states. It postponed the main rules. In 2025 Malta also introduced a final tax of 15%. Groups can choose this flat rate if they prefer it to the refund system. A founder can relocate to Malta and manage the business from there. The tax result is then one of the lowest in the European Union.

The costs of the 5% rate

Cash flow. The company pays the full 35% first. The shareholder gets the refund after the dividend and the claim. The tax authority processes electronic claims quickly. For a company that keeps its profit for growth, the full 35% applies until it pays a dividend.

Two companies. The shareholder receives the refund, so the usual structure has a holding company above the trading company. You then have two annual audits, two sets of tax filings, substance declarations and more deadlines. With a single Dutch BV, you file everything for one company.

Where the company is managed. This is the most important point. Germany, France, Italy and the Netherlands have controlled foreign company rules. Under these rules, the tax authority checks the effective rate and who takes the decisions. Suppose you manage a Maltese company with a 5% effective rate from your home in Utrecht. You will then get a Dutch tax bill and a discussion with the Tax Administration. Malta works well for a founder who relocated there. A founder who stayed at home must meet strict conditions. Banks and large business partners also ask questions, and you need documents to answer them.

Goods and location. Large volumes of goods for the European Union are shipped through Rotterdam and Antwerp. With an Article 23 licence, you declare the import VAT in your periodic VAT return. You then have more working capital for every container. See the calculation in the e-commerce test.

Combining Malta and the Netherlands

A founder who lives in Malta manages the Maltese trading company. The founder adds a Dutch BV when there are European imports, licences, employees or public contracts. Groups that started in Malta often keep the Maltese company for its original work. They put the European operations in a BV, with a Dutch holding above it for a later sale. With a shareholding of 5% or more, the participation exemption covers both dividends and sale proceeds. You can compare all points in the master table. The seven questions behind it are on the page where to incorporate.

Frequently asked questions

How does the Maltese 6/7 refund work in practice?

The company pays 35% corporate tax on its profit. After a dividend, the shareholder claims a refund of six sevenths of the tax paid. The Maltese tax authority then keeps 5% of the original profit. For passive interest and royalties, the refund is five sevenths, and the effective rate is 10%. Under the fiscal unit regime, a group can settle the net amount directly.

Does the 5% effective rate survive the global minimum tax?

Yes, for groups with consolidated revenue below 750 million euro. Almost every owner-managed business is below this threshold. For these groups, the refund system still applies. Malta used the exception for small member states to postpone the main Pillar Two rules. Groups that prefer one flat rate can choose a final tax of 15%.

What does a Maltese company need when the founder lives elsewhere?

It needs real management in Malta: the board, the decisions, the people and the records. Most European countries have controlled foreign company rules. Under these rules, the home country can tax the profit when the foreign rate is low and the real decisions are made elsewhere. The main question is whether the founder relocated to Malta.

Malta or the Netherlands for selling goods into the EU?

Both are EU member states, so a company in either country can take on the European roles. For large volumes of goods, the Netherlands is usually the better choice. You ship containers to Rotterdam. With an Article 23 licence, you declare the import VAT in your VAT return. Staff, banks and logistics partners are close by. Malta suits services, licensing and holding functions managed from the island.