Ireland vs Malta — 12.5% vs 5% Effective
Malta's effective 5% CT rate (via the 6/7 shareholder refund) is lower than Ireland's 12.5%. But Malta requires waiting for refunds (historically 12–24 months) and is primarily strong for gaming, f...
The effective rate difference
| Factor | Ireland | Malta |
|---|---|---|
| Headline CT rate | 12.5% (trading) | 35% |
| Effective rate | 12.5% | ~5% (after 6/7 refund) |
| Refund mechanism | N/A | Filed after dividend distribution |
| Refund timing | N/A | Historically 12–24 months |
| R&D credit | 25% refundable | Varies; less generous |
| EEA director | Required (or €25K bond) | No (company secretary must be Malta resident) |
| Year 1 cost | €2,150–7,750 | €4,345–10,445 |
| Strengths | Tech, pharma, financial services | Gaming, iGaming, financial services, shipping |
| Treaty network | 75+ | 70+ |
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Malta's refund timing is the key risk
The 6/7 refund is real — but it is a refund that must be claimed and processed after distribution. Malta Tax Authority processing times have historically been 12–24 months. During that period, the company has paid 35% CT and is waiting to receive 6/7 back.
For a company distributing €1M/year: Malta CT = €350,000. Refund due: €300,000. Cash flow impact: the company has paid €350,000 and waits up to 2 years for €300,000 back.
This requires working capital to manage. Companies with strong cash reserves handle this easily. Startups or companies with tight cash may find this problematic.
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Malta's genuine strengths
iGaming / online gaming: Malta's MGA licence is the EU standard for online gambling. If you're in this industry, Malta is the jurisdiction. There is no equivalent in Ireland.
Financial services: MFSA-regulated fund managers, investment services firms, and insurance companies benefit from Malta's EU regulatory framework.
Shipping: Malta has favourable tonnage tax rules for shipping.
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Choose Ireland if: ✅ Technology company (SaaS, software, IT services) ✅ R&D-intensive business ✅ Cash flow sensitivity (no refund timing issue) ✅ English-speaking EU team
Choose Malta if: ✅ iGaming, online gambling, or related services ✅ Financial services requiring MGA or MFSA licensing ✅ Holding structure where the effective 5% rate justifies refund timing ✅ Shipping company
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This content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.