Taxation on Trusts

Under the Income Tax Act of Malta, trusts are treated in a transparent manner with income attributable to the trust taxed when it is distributed to the beneficiaries. When a trust has no beneficiaries resident/domiciled in Malta and there is no income attributable to the trust earned in Malta, the trust is not liable for any taxes in Malta and filing a tax return in Malta is not required. The non-resident beneficiaries will be notified by Mdina Trust Services Limited of the income they have received and of their responsibility for reporting such income in their jurisdiction as required by their own status. Alternatively, the trustees can opt to have the trust taxed as the equivalent of a corporation and thus pay income taxes at the rate of 35%, with subsequent distributions to beneficiaries not burdened by any further tax liabilities.