Malta's immigration law provides attractive residence schemes with corresponding favourable tax systems. Personal tax residence for persons domiciled outside Malta gives rise to remittance based tax regime (no taxation on worldwide income) meaning that tax is only due on Malta sourced income and foreign income received in Malta. Foreign nationals taking up residence under the Residence Scheme Regulations 1994 (Malta Permanent Resident Scheme) are taxed at a flat rate of 15% on remitted income.
Foreign nationals may also take up Ordinary Residence and be subject to the normal rates of income tax with no minimum. Malta does not impose any 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 3 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 Residence Certificate
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 has enough funds to sustain himself, 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 personal income tax rates are, however, the normal rates of personal income tax applicable to residents are as follows.
Tax Rates 2011
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Married
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Single
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|
Income, Euros
|
Tax Rate
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Income, Euros
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Tax Rate
|
|
0 - 11,900
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0
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0 - 8,500
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0
|
|
11,901 - 21,200
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15%
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8,501 - 14,500
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15%
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21,201 - 28,700
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25%
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14,501 - 19,500
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25%
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over 28,701
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35%
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over 19,501
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35%
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Household Effects
EU Citizens may import their household effects into Malta free of VAT and import duties.
Motor Vehicles
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.
Residency Service
Our international relocation team provides personalised assistance with documents preparation and handles application for permanent or ordinary residence in Malta to ensure a successful outcome of your residency application. We are also able to facilitate your relocation and settlement in Malta with guidance as to bank account opening procedures, obtaining a European Health Insurance, applying for Identify Cards and a Driving Licence. Our lawyers are able to assist with property conveyancing for property purchases in accordance with your residence permit requirements.
For information about our personal tax services, click here.