Malta (a small Island country in Mediterranean Ocean, near Italy in Europe) is a Blockchain & crypto-friendly Jurisdiction.
It has promulgated 3 progressive laws to transparently regulate Blockchain & Cryptocurrency & NFTs etc.
The Laws include The Malta Digital Innovation Authority Act, The Technology Arrangements and Services Act and the Virtual Financial Assets Act. Further, The Malta Government has adopted quite a straightforward approach to the treatment of cryptocurrencies for income tax purposes. All the old principles and jurisprudence in relation to income and capital is by analogy applicable to transactions involving cryptocurrencies. Thus, the same questions would be posed when analyzing a cryptocurrency transaction as would be the case have the transaction involved “regular” assets. Also, VAT is not applicable on cryptocurrencies.
Further, their is a 2015 India – Malta Double Tax Avoidance Agreement (DTAA) and also including provisions of Information Exchange & Avoidance of Tax Evasion.
Under the aforesaid DTAA, Business Profits with Permanent Establishment in Malta will be Taxable in Malta & Indian Resident can get deduction of Malta Tax paid under India – Malta DTAA.
Further, Capital Gains on Virtual Digital Asset & Business Profits without PE will be Exclusively taxable in India under India – Malta DTAA for India Resident.
Malta is not a Tax Haven – has progessive rates of Income Tax from Nil to 35% & Flat rate of Corporate Tax @ 35%. Further MALTA has incorporated KYC / Anti Money Laundering in its domestic legislation. It also has a FATCA treaty with USA. However, MALTA continues to be on Grey-List of FATF – Financial Action Task Force, the global AML watchdog.
CA Nirmal Ghorawat's Blog 