Malta extends exemption for royalties deriving from copyright

Malta has reaffirmed its role as a leading role as an international hub for intellectual property tax planning by extending its tax exemption to royalties and similar income derived from copyright, including advances derived from copyright.

Prior to these amendments, the exemption from royalties and similar income was restricted to patents in respect of inventions.  The legal framework –  Legal Notice 429 of 2010, the Deduction on Royalties derived from Patent Rules (“the Rules”) provided a tax exemption on royalties and similar income from patents and inventions on or after 1 January 2010, provided that an application regarding qualified patent was made to Malta Enterprise, the Government arm responsible for the incentivising of foreign investment and industrial development in Malta.

The new amendments, signal a welcome step to investors, primarily because copyright, contrary to patents, are subject to less stringent registration criteria, and secondlybecause copyright of its very nature, extends protection to literary and artistic works in the widest possible sense, therefore allowing more investors the possibility of this tax exemption.