Malta: Withholding tax and the disclosure of beneficial owners

We would like to inform customers that Maltese equities, government bonds and corporate bonds are eligible for settlement and custody in Clearstream Banking¹ via CBF CSD link with Malta and depository CBF (depository code 43).

In addition, we would like to inform customers about Maltese withholding tax and the disclosure of Maltese beneficial owners.

N.B.: The following s information does not relate to Maltese securities deposited in CBL by specialised depositories.

Withholding tax

The maximum rates of withholding tax are as follows:

• Dividends: 35%;
  
• Interest payments:
  

• 15% for Maltese residents;
  
• 0% for non-residents of Malta.

Tax services

For dividends from Maltese equities, relief at source and reclaim of withholding tax are not currently available and customers are recommended to submit their tax reclaim applications directly to the Maltese Tax Authorities under consideration of the respective Double Taxation Treaty and in consultation with a tax adviser.

For interest payments on Maltese corporate bonds and government bonds, it is assumed that customers do not hold Maltese securities on behalf of Maltese residents and, consequently, interest is always paid gross.

If, in exceptional circumstances, a Maltese resident nevertheless holds Maltese securities through Clearstream, Banking, then the respective customer must, unrequested, inform Clearstream Banking, at the latest three business days before the coupon record date, of the corresponding split between Maltese resident and non-resident beneficiaries.

In such a case, interest payments would be subject to withholding tax as detailed aboveove.

Residence status declaration for Maltese tax purposes

Clearstream Banking is under an obligation to disclose to the Malta Stock Exchange the residence status for Maltese tax purposes of persons beneficially interested in the eligible securities.

To avoid segregation at customer account level, Clearstream Banking assumes that their customers will be holding eligible securities on behalf of beneficial owners that are not resident in Malta for Maltese tax purposes and thus are not subject to Maltese final withholding tax on investment income in accordance with the provisions of articles 33(1) and 41(c) of the Income Tax Act (Chapter 123 of the Laws of Malta).

Where a beneficiary who is a Clearstream Banking customer becomes resident in Malta, the customer undertakes to provide Clearstream Banking with a SWIFT MT568/MT599 message, at the latest three business days before the coupon record date, disclosing the total position of securities held by residents of Malta (that will be taxed at a withholding tax rate of 15%) and by non-resident beneficiaries.

Further information

Details regarding settlement and settlement timings are described in Announcement A11045, the Cascade Link Guide (Malta) and the Creation Link Guide (Malta).

For further information about our products and services, please contact Clearstream Banking Customer Service or your Relationship Officer.

1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in the Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking, société anonyme, registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).