Personal Tax Programmes

Any person resident in Malta but not domiciled is subject to tax on what is known as the ‘remittance basis’. This means that such a person would be subject to tax on any income arising to him in Malta or otherwise remitted to Malta from overseas. Furthermore, Malta has introduced a number of residence schemes for both EU/EAA citizens as well as Individuals coming from non-EU countries which are combined with their own particular tax regulation.

 

TAX BENEFITS UNDER THE RESIDENCE PROGRAMMES

Holders of residence certificates under the residence programmes benefit from:

A flat rate of personal income tax of 15%, chargeable only on a remittance basis;

Foreign source income received in Malta is subject to Malta tax only if remitted to Malta while foreign capital gains are altogether outside the scope of tax in Malta;

Local source income arising from business, investment or other economic activity held in Malta is subject to tax at 35%;

An annual minimum tax of €15,000, payable annually in advance, covering the holder and all his dependants;

Applicants are not legally bound by minimum stay requirements. However, they must not spend more than 183 days in a calendar year in another jurisdiction as this may make them tax resident in that jurisdiction too.

QUALIFICATIONS FOR TAX RESIDENCE

In order to qualify for tax residency an applicant will need to satisfy the following conditions:

1.         Applicant must buy or rent property in Malta.

I.          Property purchased in the island of Malta must have a minimumvalue of €275,000;

II.         Property purchased in the island of Gozo or in the South of Malta must have a minimum value of €220,000; OR

III.        If the applicant opts for rental of property, the property must have a minimum annual rental value of €9,600 (or €800 a month) in Malta and €8,750 (or €730 a month) in Gozo or in the South of Malta.

4.         Non-EU/EAA applicants will not be eligible to benefit from Malta’s free State healthcare system and is therefore required to purchase all-risks private medical insurance.

5.         An Applicant must be in financial good standing, not have any criminal record and speak English adequately.

 

PERSONAL TAX RATES

The Tax Rates applicable to individuals are progressive rates, with a tax free bracket, reaching a maximum rate of 35% for income above €60,000. They are charged on an individual’s income for the year from a number of sources in the following manner: 

Maltese law offers foreign individuals who choose to reside in Malta alone or together with their families two important tax residence programmes.

PENSIONERS

An optional Malta retirement tax programme applies for EU nationals. Under this retirement programme, beneficiaries retiring in Malta will be granted a special tax status which entitles them to a personal Malta tax liability of 15% on any income arising outside Malta which is remitted to Malta, subject to a minimum Malta tax liability of €7,500 per year of assessment plus €500 per dependent. Other chargeable income (essentially local source income) would be subject to Malta tax at a flat rate of 35%. 


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