Malta’s tax system offers a number of advantages for foreign multinationals and wealthy individuals. On paper, a company is subject to income tax in Malta at a flat rate of 35%. In reality, Malta applies a full imputation system to relieve the economic double taxation otherwise arising on the taxation of dividends received by shareholders, which reduces the effective tax rate to just 5% for trading companies. Shareholders can receive a tax refund of up to six-sevenths of their tax paid in Malta. This system is applicable to both resident and nonresident shareholders, which is why it is not considered a selective tax advantage according to European competition law. In addition, Malta appears to be an interesting place for companies to locate their intellectual property rights. Its low taxation on intellectual property income is considered by some to directly promote or prompt aggressive tax planning structures. This is combined with a lack of national anti-tax avoidance measures such as no interest-deduction-limitation rules, no controlled foreign companies’ rules, or no rule to counter a mismatch in tax qualification of domestic partnership or company.