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The Income Tax exemption announced in November 2011 by
Malta's Minister of Finance, the Economy and Investment during
his budget speech has been introduced and has come in force in
respect of royalties received from certain copyrightable
intellectual property on books, film scripts, music and art.
The Budget Measures Implementation Act of 14 May 2012 amended
the Income Tax Act to reflect this exemption. Article 12(1)(v) of
the said Act exempts royalties, advances and similar income derived
from copyright. This will apply whether the royalties were received
in the course of a trade, business, profession or vocation or
otherwise.
Intellectual Property Companies in Malta
Your Intellectual Property may well be your company's
greatest asset. The introduction of this exemption is an
interesting development for Intellectual Property companies that
are tax resident in or relocating to Malta - as well as for
individuals who receive royalties for their work.
Royalties from qualifying patents and royalties from qualifying
copyright are exempt from income tax, while non-qualifying
royalties may still benefit from low effective tax rates.
Copyrightable material
Royalties deriving from copyright are not defined by The Income
Tax Act to date but the Copyright Act, Chapter 415 of the Laws of
Malta, lists the following work as eligible for copyright, subject
to certain conditions and exclusions:
Artistic works
Audiovisual works
Databases
Literary works
Musical works
The Act also defines artistic work as including, irrespective of
the artistic quality, any of the following:
paintings, drawings, etchings, lithographs, woodcuts,
engravings and prints
maps, plans, diagrams and three-dimensional works relative to
geography, science or topography, but excluding semiconductor
product topographies
works of sculpture
photographs not comprised in an audiovisual work
works of architecture in the form of buildings or models
works of artistic craftsmanship, including pictorial woven
tissues and articles of applied handicraft and industrial art
Conditions
A Legal Notice is expected to be published shortly to set out
conditions that need to be met in order to benefit from the Income
tax exemption.
CSB Group handles all areas of Intellectual Property including
Trade Marks, Patents and Designs at all levels including searches,
applications, opposition matters, enforcement in the law Courts and
final registration. We act for and through attorneys in major
countries around the world.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A further nine countries signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, at a ceremony held by the Organization for Economic Cooperation and Development.
Despite being among the smallest countries in terms of area and population, Cyprus has become one of the world’s most important financial and business centres.
Recent changes in Cypriot legislation have not had a significant impact on the international status of Cyprus as a reputable financial centre which offers one of the most attractive tax regimes in Europe and an extensive network of double tax treaties.
In accordance with its agreement with international lenders, Cyprus has made a number of changes to its tax rates.
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