Gibraltar Holding / Malta Subsidiary / Brexit

[jackfrost]

Gibraltar Non-Resident Holding - holding a Malta Limited with a non-dom owner living in Malta.

Does anyone have any insight on how the possible brexit scenarios will influence that?

 

[Martin Everson]

I can only speculate that a Malta non-dom should still get the 6/7 full imputation tax rate with a Gibraltar shareholding company post brexit. However in a hard brexit Gibraltar like the rest of the UK becomes a third country to EU like Turkey or Zimbabwe is, but this is unlikely..

Best to wait to see what Spain and UK negotiate about Gibraltar (mid October) as Spain sees Gibraltar as a tax haven and may likely want some sort of concession over the rock in return for a not vetoing any brexit deal.. Either way speak to a local tax advisor. I don't think it will have any impact on the Malta full imputation system for you unless Malta only accepts countries as shareholders who fall under the EU parent subsidiary directive - in which case Malta will not post brexit .

Editorial | Gibraltar after Brexit

 

[jackfrost]

Thanks yes i will do that either way. I just always like to get 2-3 opinions.

At the end there is still the option of switching over to a Cyprus Holding.

 

[1nomad]

Why do you need a Maltese company? If you live in Malta you can simply use their remittance tax system just with your Gibraltar company or what's the problem? Maybe a bank account?

 

[jackfrost]

Quite simple. This is a serious real business. You will never want to run that over just a Gibraltar non-resident company.

The benefit of having a proper Limited in a proper jurisdiction that you also live in as the director with proper personal residency + tax id, full VAT, EUR SEPA, fully taxed profits at normal tax rate, fully taxed personal income at normal tax rate, social security if you wanted to, double tax agreements with most of the world, employee considerations etc by FAR outweighs 5%. Heck it would outweigh 10, 15%.

 

[1nomad]

I see, thanks

 

[jackfrost]

Also unless your income is purely passive you cannot do this. You will be taxed based on where you do the work which is Malta. So if you don't tax your work in Malta and simply say the Gib company is doing it you are committing full scale tax fraud etc. It just doesn't work. Apart from the things mentioned above which are absolutely crucial if you want to participate in society.

 

[1nomad]

Malta doesn't have CFC rules for now so I think you can manage a foreign company without any issues. ATAD will probable change it from 2019, but then also your Gib. company, managed from Malta, will be considered as a Maltese comp. I cannot find if there is something like a minimum non-dom corporate tax similarly to 5000 EUR for personal earnings outside of Malta over 35000 EUR

 

[JohnLocke]

You may do some planning with a local tax consultancy in your country. There are major benefits for large corporation to setup a holding company for instant in Cyprus, however, sometimes it makes no sense to do so if you pay all your taxes locally then there may be better options you may look at.

 

[jackfrost]

Yes ATAD is the key here for many issues.

How CFC will influence the full imputation system remains to be seen. At first it should not make a difference as the CFC rules are specifically geared towards shifting profits which are not taxed at the source / subsidary and not the parent. Beauty about Maltese LTD+Holding is always that you are taxing all of your profits at 35% at source already. Question is if the full imputation / refund will still accept the outside holding as a foreign holding. Unless Malta specifically (which they definitely do not want) implement rules for this domestic scenario that might not even be the case.

Anybody got some more professional knowledge about this?

btw yes afaik all eu members will -have to- implement cfc, hybrids, exit taxtion and gaar by end of this year to be effective 01/2019 in domestic law.

The specific domestic wording will be the key.

 

[devnull]

I just thought, that the companies were started before the Brexit happened. For a Holding company, the companies have to be within EU and at the incorporation, they were part of EU member states, so the EU law about holding companies still apply, because they were incorporated before the Brexit happened. I dont know for sure 100%.

 

[TurnedToRobot]

For someone a little stupid... does it mean that companies setup in the UK before the BREXIT will benefit from the BREXIT or not? compared to companies setup in the UK after BREXIT?

 

[Martin Everson]

Wait until after March 29th 2019 to know what this all means. It's really wait and see. No one can tell you for certain what will happen because nothing has been agreed for brexit by UK....lol .

 

[KJK]

I just thought, that the companies were started before the Brexit happened. For a Holding company, the companies have to be within EU and at the incorporation, they were part of EU member states, so the EU law about holding companies still apply, because they were incorporated before the Brexit happened. I dont know for sure 100%.

Honestly this sounds like nonsense. The law should apply equally - you have a UK company formed earlier, UK will no longer be part of EU -> same law applies to you as as to a newly formed company.

It will be fun to watch, I imagine a lot of consultants, lawyers, advisors etc. in London will have a lot of work to do. In the end, it won't help anyone, regular people won't benefit from it... it will be a nightmare for international companies based in UK... but yes that's what (some) people of UK wanted.

 

[Martin Everson]

The nightmare will continue with EU ATAD and exit taxation from UK that starts from 1st Jan 2019 and latest 2020. Large corporations will be taxed as if they sold all their corporate assets on the day they try and leave the UK. Bottom line large companies are trapped in UK . UK law does not even allow tax advisory firms in UK to warn clients as promoting tax avoidance schemes in UK is an offense I believe.

I explained how it works in this thread below

UK tax minimising