Taxation of trusts

If all beneficiaries are resident outside of Malta, the trust will be exempt from Maltese income tax on income arising outside Malta and income on dividends, gains and royalties arising from within Malta.

For Malta tax purposes, the trust is regarded as transparent and income and gains are deemed to have been received by the beneficiaries. A trustee may therefore make distributions out of a trust fund established in Malta without any withholding or deduction of Malta income tax.

No inheritance, wealth or gift taxes are levied in Malta. However other forms of taxation, such as the transfer charge, income tax on capital gains, stamp duty and VAT may apply to immovable property in Malta. An exemption can be applied where the settlor is also the sole beneficiary of the trust.