Malta offers attractive residence schemes with associated tax advantages including no taxation on worldwide income, with taxation only on Maltese sourced income and foreign income received in Malta. Foreigners may take up residence in Malta and be subject to the normal rates of income tax with no minimum tax or remittance requirements. There are no net wealth or real estate taxes. whilst a tax on capital gains arising from the sale of immovable property in Malta does exist, this does not apply to the sale of one’s main residence if the property is owned and occupied for at least three years.
Malta encourages foreigners to take up residence in Malta. The policy is supported by an attractive tax structure, amongst other advantages. Foreigners residing in Malta are not taxed on their worldwide income but only on Maltese source income and on foreign income remitted to Malta. Malta's tax legislation provides for relief from double taxation, whether through negotiated double tax agreements with a substantial number of countries worldwide, or through unilateral provisions. Certain foreign income remitted to Malta qualifies for a reduced withholding rate of foreign tax (this applies typically to dividends, interest and royalties), or is exempt from foreign tax (this applies typically to private pensions and to certain capital gains). The provisions of each particular treaty entered into by Malta must, however, be consulted to determine eligibility.
EU Registration Certificate
Details regarding the Permanent Residence Scheme will be updated in a separate article Personal Taxation in Malta ( Part 2)
An individual may also take up residence in Malta other than in terms of the Permanent Residence Scheme. EU nationals intending to take up residence in Malta must register with the local Immigration Authority as well as the Tax Department. An EU national shall be allowed to stay in Malta providing that he/she has enough funds to sustain himself/herself, private or State health cover and a place of abode.
Taxation
For tax purposes an individual is normally regarded as being resident in Malta for particular year if, in that year, his stay in Malta exceeds 183 days. As already noted, however, foreigners residing in Malta are not taxed on their worldwide income, but only on Maltese source income and capital gains and on foreign source income remitted to Malta. Foreign source capital gains are not taxed even if remitted to Malta. The applicable income tax rates are, however, the normal rates of income tax applicable to residents, which are as follows:
| Married | Single | ||
|---|---|---|---|
| Income, Euros | Tax rate | Income, Euros | Tax rate |
| 0 - 11,900 | Tax Free | 0 - 8,500 | Tax Free |
| 11,901 - 21,200 | 15% | 8,501 - 14,500 | 15% |
| 21,201 - 28,700 | 25% | 14,501 - 19,500 | 25% |
| over 28,701 | 35% | over 19,501 | 35% |
Household Effects - EU Citizens may import their household effects into Malta free of VAT and import duties.
Car -EU citizens may register a car in Malta without the payment of any tax provided that they can prove that they have transferred their residence to Malta and have owned the car for 24 months prior to it being brought into Malta. The car must be brought into Malta within 12 months of taking up residence.
Inheritance and capital transfer tax
There is no general inheritance tax system in Malta. However, upon the transfer or transmission (upon death) :
-Real estate or shares in a company owning mainly real estate a duty of 5% is payable;
-Marketable securities (mainly shares in Maltese companies) a duty of 2% is payable
THIS INFORMATION HAS BEEN PROVIDED BY JOHN HUBER AND ASSOCIATES TAX SERVICES MALTA.
E-mail queries should be forwarded to info@johnhubermalta.com
Disclaimer - No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.
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