Tax Advisor Dresden Malta: Your Guide to International Tax Advantages in the Elbe Metropolis

Malta Tax Consulting in Dresden: Why the Elbe Metropolis Is the Ideal Starting Point

Dresden isn’t just famous for its baroque architecture and the Semperoper. The Saxon capital has also developed into a dynamic business hub.

And that’s exactly where your advantage lies.

As an entrepreneur in Dresden, you benefit from a unique geographical position. You’re close to Germany’s traditional economic centers, yet the markets of Eastern Europe are within easy reach.

This constellation makes Malta structures particularly interesting.

Why Dresden and Malta Are the Perfect Match

Let me give you a practical example:

Thomas, an IT entrepreneur from Dresden, offers online services to customers in Germany, Poland, and the Czech Republic. His annual profits are about €300,000.

In Germany, he pays:

• Corporate income tax: 30% = €90,000
• Dresden trade tax: 16.1% = €48,300
• Dividend withholding tax: 26.375% = €42,400

Total tax burden: €180,700

With an optimized Malta structure, this burden is significantly reduced. More on that later.

The Advantages of Dresden’s Economic Location for Malta Structures

Dresden offers several strategic benefits for international tax planning:

Dresden as the Launchpad for Pan-European Activities

This is the key to successful Malta structures.

German tax authorities are more likely to accept international setups when real business activities are evident. Dresden’s proximity to Eastern Europe is ideal for this purpose.

Also: Saxony’s tax administration has more experience dealing with cross-border matters than many other federal states.

This means for you: Less hassle, faster procedures.

The Advantages of Maltese Tax Structures for Dresden Entrepreneurs

Now we get to the heart of the matter.

As an EU member, Malta offers unique tax benefits. With the right advice from Dresden, you can make full legal use of them.

But beware: Not everything that glitters is gold.

Understanding the Maltese Tax System

Malta uses the Imputation System (credit method). This means:

Maltese companies pay 35% corporate tax up front. But—and here’s where it gets interesting—when profits are distributed, significant refunds are available.

Depending on the type of income, you can receive between 5/7 and 6/7 of the taxes paid back.

Here’s a practical example for our Dresden entrepreneur, Thomas:

1. Profit in Malta: €300,000
2. Corporate tax Malta: €105,000 (35%)
3. Refund on distribution: €90,000 (6/7)
4. Effective tax burden in Malta: €15,000 (5%)

Savings compared to Germany: €165,700 annually

Which Business Models Benefit Most?

Not every business model is equally suitable for Malta structures. Here’s what I’ve found in practice:

The 6/7 Refund in Detail

Let’s go a bit technical—but don’t worry, I’ll make it easy to understand.

The 6/7 refund applies to foreign-sourced income, i.e. profits from business conducted outside Malta.

For Dresden entrepreneurs, this means:

• Services for German clients: 6/7 refund
• Business with Eastern European partners: 6/7 refund
• EU-wide online services: 6/7 refund

Important: The activities must be managed from Malta. So you’ll need real substance on site.

IP-Box Regime: Extra Benefits for Intellectual Property

Malta offers an especially attractive IP-Box regime. Income from intellectual property is taxed at a flat effective rate of just 5%.

This is attractive for:

• Software developers from Dresden
• Patent holders
• Trademark managers
• Know-how sellers

Elena, a marketing entrepreneur from Dresden, uses this structure for her software tools. Her license income of €200,000 per year is only taxed €10,000 in Malta.

In Germany, it would have been €60,000.

EU Holding Structures with Malta: Expert Knowledge from Dresden

Now it gets strategically interesting.

A Malta holding can become the heart of your international tax structure—especially for Dresden entrepreneurs active in Eastern Europe.

What Is an EU Holding Company—and Why Malta?

A holding company holds shares in other companies. In Malta, it enjoys special advantages:

Participation Exemption: Dividends from subsidiaries are tax-exempt. Capital gains from share disposals too.

EU Parent-Subsidiary Directive: No withholding tax on dividends within the EU.

Double Tax Treaties: Malta has more than 70 tax treaties worldwide.

Practical Malta Holding Structure for Dresden Entrepreneurs

Here’s a proven structure I often recommend:

1. Malta Holding Ltd. – Top level
2. German Subsidiary (Dresden) – German operations
3. Czech Subsidiary (Prague) – Eastern European markets
4. Polish Subsidiary (Warsaw) – Further EU expansion

Benefits of this structure:

• Profits flow to the Malta holding tax-free
• Centralized liquidity management
• Optimal use of double tax treaties
• Simple expansion into new countries

Substance Requirements: What You Really Need

This is where the wheat is separated from the chaff.

Many providers promise Malta structures without real substance. That no longer works. The German tax authorities run tight checks.

Minimum requirements for genuine substance in Malta:

Robert, a well-established business consultant from Dresden, invests around €60,000 per year in genuine substance—and saves €180,000 in taxes.

ROI: 300%

Avoiding Common Mistakes with Malta Structures

From my consulting experience, these are the most common pitfalls:

Mistake 1: Shell Company
Without real substance, your structure gets exposed at the first audit.

Mistake 2: Incorrect Profit Allocation
Profits must arise where value is actually created.

Mistake 3: Inadequate Documentation
Every decision must be made and recorded in Malta.

Mistake 4: Excessive Profit Shifting
Usually, 50–70% of overall profits to Malta is the reasonable maximum.

That’s why I only work with structures that can withstand a thorough audit.

Tax Advisor Dresden Malta: How to Find the Right Partner in the Elbe Metropolis

Choosing the right tax advisor is crucial for the success of your Malta structure.

Not every Dresden advisor is proficient in international setups. Here are the selection criteria you should look for.

Key Qualifications of Your Malta Tax Advisor

A qualified Malta specialist should offer the following:

1. International Experience: At least 5 years handling cross-border structures
2. Malta Expertise: In-depth knowledge of Maltese tax law
3. Local Networks: Contacts to Maltese consultants and authorities
4. Substance Advisory: Proven experience in building real business presence
5. Compliance Focus: Full transparency with German authorities

Questions to Ask Your Advisor

These questions help you separate the wheat from the chaff:

• How many Malta structures have you successfully implemented in the last 3 years?
• Can you provide references from Dresden clients?
• How do you ensure substance requirements are met?
• What are the realistic annual total costs?
• How do you handle audits by German tax authorities?

Warning Signs When Choosing an Advisor

Be wary of these statements:

Malta structures work without substance.

The tax office will never find out.

You’ll never have to visit Malta.

We guarantee 90% tax savings.

Reputable advisors talk about opportunities and risks. They don’t promise miracles.

Costs for Qualified Malta Advisory in Dresden

Typical advisory costs in Dresden:

Sophie, a rising coaching entrepreneur from Dresden, initially invested €18,000 in her Malta structure. She saved €45,000 in taxes in her first year alone.

Local Recommendations: Dresden Advisors with Malta Expertise

There are several qualified advisors in the Dresden area. Key points of contact:

• Chamber of Tax Advisors Saxony: Referral of specialized advisors
• Dresden Chamber of Commerce: Referrals for international tax consulting
• Chamber of Auditors: Leading firms with Malta departments
• GTAI Dresden: Germany Trade & Invest local office

My tip: Make appointments with 2–3 advisors. Compare not only price, but especially expertise and trust.

Practical Implementation: From Dresden to Malta – Your Step-by-Step Guide

Theory is one thing. But what you want is: How do I actually get it done?

Here’s my proven roadmap for setting up your Malta structure from Dresden.

Phase 1: Strategy and Planning (Weeks 1–4)

Week 1: Status Analysis

• Assess your current tax burden
• Review business model for Malta suitability
• Analyze international activities
• First cost estimate

Weeks 2–3: Structure Planning

• Develop optimal corporate structure
• Define substance requirements
• Calculate tax implications
• Create compliance concept

Week 4: Finalization

• Complete detailed planning
• Finalize cost calculations
• Set implementation timeline
• Make go/no-go decision

Phase 2: Company Formation in Malta (Weeks 5–12)

Required Documents for Malta Formation:

1. Articles of association (Memorandum & Articles)
2. Director appointment
3. Registered office proof
4. Bank references
5. Police clearance certificate
6. Due diligence documents

Typical timeline:

• Company formation: 2–3 weeks
• Bank account opening: 4–6 weeks
• Tax registration: 2–3 weeks
• Building substance: 6–8 weeks in parallel

Phase 3: Building Substance in Malta (Weeks 6–16)

You build real substance in parallel with incorporation:

Office in Malta:

• Select location (Valletta, Sliema, St. Julian’s)
• Sign rental agreement
• Procure office equipment
• Install IT infrastructure

Recruit staff:

• Draft job advert
• Interview candidates
• Sign employment contracts
• Organize onboarding

Establish operations:

• Transfer business processes to Malta
• Set up documentation systems
• Define communication channels
• Implement quality control

Phase 4: Business Migration (Weeks 13–20)

This step is critical. The migration must be gradual and well-documented:

1. Adapt client contracts – New contracting party: Malta Ltd.
2. Shift management – Key decisions to be made in Malta
3. Switch accounting – Maintain Maltese books
4. Switch banking – Run cash flows via Malta
5. Establish compliance – Set up reporting systems

Phase 5: German Adjustments (Weeks 16–24)

Your German structure needs to be adjusted:

Tax registrations:

• Notify Dresden tax office
• AO notice for Malta company
• Adapt German company as required
• Double tax treaty application

Corporate law changes:

• Reduce share capital of German company
• Adjust the corporate purpose
• Update management structure
• Update commercial register

Checklist: Common Pitfalls to Avoid

These issues often cause problems:

Malta Tax Consulting Dresden: Costs, Prices, and Time Investment

Let’s get to one of the biggest questions: What does a Malta structure really cost?

Many providers lure you in with low entry prices—then come the nasty surprises.

Here’s a realistic full cost calculation.

One-Off Costs of Setting Up a Malta Structure

Ongoing Annual Costs of the Malta Structure

This is where the real costs come in:

Break-Even Calculation: When Does Malta Pay Off?

Your current tax burden is the key. Here’s a sample calculation:

Example: Thomas from Dresden

• Annual profit: €300,000
• German tax burden: €180,000
• Malta tax burden: €15,000
• Tax savings: €165,000
• Malta costs: €95,000
• Net savings: €70,000

With lower profits, it looks different:

Example: Sophie from Dresden

• Annual profit: €150,000
• German tax burden: €90,000
• Malta tax burden: €7,500
• Tax savings: €82,500
• Malta costs: €80,000
• Net savings: €2,500

Rule of Thumb for the Malta Decision

Malta structures are generally worthwhile from:

• Minimum profit: €200,000 per year
• Optimal profit: €300,000+ per year
• Planning horizon: At least 5 years

Below that, the costs often exceed the savings.

Avoid Hidden Costs: What to Watch Out For

These expenses are often overlooked:

1. Qualified staff are costly – Budget €40,000–50,000 for skilled personnel
2. Offices in prime locations cost more – Valletta or Sliema pricier than suburbs
3. German compliance is often underestimated – Annually €10,000–15,000 is realistic
4. Travel costs rise – Monthly visits are essential for substance

Legal Peculiarities: Malta Structures for Saxon Entrepreneurs

Legal certainty is absolutely vital in international tax structures.

Especially in Saxony, tax authorities are alert to cross-border arrangements. You need to be extra diligent here.

Mandatory Notifications in Germany: What You Need to Know

As a Dresden entrepreneur with a Malta structure, you have extensive reporting obligations:

Notification Duty under Section 138 AO:

• Formation of the Malta company
• Start of business activities
• Changes in corporate structure
• Deadline: Within one month

Foreign Tax Act notifications:

• Notice of foreign company
• Annual profit and loss statements
• Proof of management activities
• Evidence of real business activities

Avoiding Exit Taxation: How to Do It Right

This is the most critical issue with Malta structures.

Exit taxation occurs when Germany deems that your company’s management has been relocated abroad.

The result: All hidden reserves are revealed and immediately taxed.

How to avoid exit taxation:

1. Gradual transition – Don’t move everything to Malta at once
2. Keep German management – Key decisions still made in Germany
3. Arm’s length principle – Fair profit allocation between Germany and Malta
4. Documenting substance – Proof of real Maltese business activity

Special Regulations for Saxon Entrepreneurs

The Dresden tax office and Saxony’s tax authorities have particular experience:

Positive aspects:

• Experience with international structures due to the border location
• Pragmatic approach to EU law
• Faster processing of double taxation agreement applications

Critical points:

• Thorough checks of Malta structures
• Strict documentation requirements
• Stringent substance review

Current Case Law on Malta Structures

Key rulings you should know:

BFH ruling of December 17, 2020 (I R 35/18):
Maltese companies with genuine substance are recognized for tax purposes.

Main takeaways:

• Real business operations are decisive
• Shell companies are not recognized
• Arm’s length principle must be followed
• Decision-making must be documented

ECJ ruling on the EU Parent-Subsidiary Directive:
Withholding tax exemption also applies to Malta structures provided there’s no abuse.

Compliance Checklist for Malta Structures

You must consistently meet these requirements:

Risks and Safeguards

Even with correct implementation, risks remain:

Legal changes: Tax law is constantly evolving

Political risks: EU-wide minimum tax is being discussed

Compliance risks: Errors in documentation or reporting

Recommended safeguards:

• Regular legal updates by specialists
• Annual compliance checks
• Document every decision
• Prepare emergency plans

Frequently Asked Questions about Malta Tax Consulting in Dresden

1. Is a Malta structure worthwhile for smaller Dresden companies?

As a rule, I recommend Malta structures for annual profits of €200,000 and above. With lower profits, the costs for real substance often outweigh the tax savings. For smaller companies, alternatives such as reinvestment models or other EU countries with simpler structures may be better suited.

2. How often do I need to travel to Malta as a Dresden entrepreneur?

To maintain credible substance, I recommend a minimum of one visit to Malta per month. Key business decisions need to be taken and documented on site. With modern communication, you can manage many day-to-day tasks from Dresden, but strategic management must happen in Malta.

3. Does the Dresden tax office recognize Malta structures?

The Dresden tax office fully recognizes Malta structures with real substance. The essential thing is proper notification and continuous compliance. Due to their proximity to Eastern European markets, Dresden-based entrepreneurs often have better arguments for international structures than businesses operating only domestically.

4. Which banks in Dresden support Malta structures?

Most major banks in Dresden (Commerzbank, Deutsche Bank, HypoVereinsbank) have experience with international structures. For the Malta side, I recommend local Maltese banks such as BOV or HSBC Malta. Account opening usually takes 4–6 weeks and requires your personal presence.

5. Can I integrate my existing Dresden GmbH into the Malta structure?

Yes—that is possible and often makes sense. Your Dresden GmbH can operate as a subsidiary under the Malta holding. This way you keep your local business operations while benefiting from Malta’s tax advantages for profits from international activities.

6. What happens if the Dresden tax authority audits my company?

With proper documentation and genuine substance, audits pose no problem. Complete transparency with the tax office and thorough records of all Maltese operations are essential. You should also have your advisor at your side during any audit.

7. What alternatives to Malta are there for Dresden entrepreneurs?

Depending on your business model, Cyprus, Ireland, or the Netherlands may also be worth considering. For Eastern European activities, a structure in Poland or the Czech Republic might make sense. The optimal choice depends on your specific activities and target markets.

8. How long does the complete setup of a Malta structure from Dresden take?

From the initial consultation to a fully operating Malta structure is typically 6–9 months. Company formation itself only takes 2–3 weeks, but building real substance and migrating business activities require time for a reliable, audit-proof setup.

9. Is a Malta structure still worthwhile amid Brexit uncertainty?

Malta is an EU member, so it’s not affected by Brexit. In fact, Malta is even more attractive as a stable EU hub for international companies. For Dresden entrepreneurs with EU-wide activities, that’s another plus point.

10. What are the costs if I want to wind up my Malta structure?

Dissolving a Malta structure usually costs €5,000–15,000, depending on complexity. Proper liquidation and tax clearance are required in both Malta and Germany. With good planning, you can “put the structure on hold” at little extra cost if desired.

11. Are there special incentive programs for Dresden entrepreneurs setting up in Malta?

Malta offers various incentives for EU companies, particularly in the tech and financial sectors. As a Dresden entrepreneur, you may also benefit from Saxony’s internationalization programs. The Dresden Chamber of Commerce can advise on suitable funding options.

12. How does a Malta structure affect my German social security status?

With the right structure, you usually remain in German social security, as your residence stays in Dresden. Maltese staff, however, are covered under local Maltese rules. Individual advice is essential here, as the regulations can be complex.