Malta residence



Residing in Malta

Pursuant to Malta’s accession to the European Union (EU) in 2004 and, furthermore, in light of the provisions of applicable domestic regulations, an EU citizen should generally be entitled to enter, remain and reside in Malta and to seek and take up employment or self-employment in Malta. An EU citizen having sufficient resources to maintain her/himself and family members should likewise be entitled to reside in Malta.

Such rights to reside in Malta should also be extended to apply in favour of family members accompanying or joining the EU citizen in Malta – including family members who are not nationals of a EU Member State and/or a partner with whom the EU citizen has a durable relationship.


Malta tax implications

An EU citizen exercising his/her entitlement to take up residence in Malta would be subject to tax in Malta on:

  • chargeable income arising in Malta – including income from employment or self- employment and domestic source investment and passive income;
  • chargeable capital gains realised in Malta – generally upon a disposal of immovable property situated in Malta or domestic securities;
  • chargeable income (not gains) arising outside Malta to the extent that such income is received in Malta.

A Malta resident individual would not, suffer ANY tax in Malta on:

  • income arising outside Malta which is not received in Malta; or,
  • capital gains realised outside Malta, even if such gains are received in Malta, in whole or in part.

However, chargeable income and gains accruing to or realised by a resident individual would be subject to tax in Malta at the following progressive rates:

Single Rates


Parental Rates


Married Rates

Percentage


Percentage


Percentage

0 to 8,500

0%


0 to 9,300

0%


0 to 11,900

0%

8,501 to 14,500

15%


9,301 to 15,800

15%


11,901 to 21,200

15%

14,501 to 19,500

25%


15,801 to 21,200

25%


21,201 to 28,700

25%

19,501 – 60,000*

32% - 2013

29% - 2014

25% - 2015/6


21,201 – 60,000

32% - 2013

29% - 2014

25% - 2015


28,701 – 60,000

32% - 2013

29% - 2014

25% - 2015

60,001 +

35%


60,001 +

35%


60,001 +

35%

The Malta tax chargeable upon a disposal of immovable property situated in Malta, however, may alternatively be levied at the flat rate of 12% on the market value of the immovable property or the consideration received by the transferor, whichever is the higher.

Double tax treaties

An individual resident in Malta would be entitled to benefit under Malta’s double tax treaties. It is assumed that an EU citizen taking up residence in Malta would not intend to settle in Malta permanently but would retain an intention to leave Malta eventually. As a result, the EU citizen would not also acquire a Maltese domicile for Malta tax purposes – please note that persons ordinarily resident and domiciled in Malta are subject to tax in Malta on a worldwide basis; that is, on all chargeable income and gains arising anywhere in the world and whether received in Malta or otherwise. As a result, a resident would, from a Malta tax perspective, be entitled to benefit from exemptions and reduced withholding rates prescribed under Malta’s double tax treaties.

In addition, a resident would be entitled to claim relief (under a treaty or under domestic tax legislation) for tax suffered outside Malta on any chargeable income received in Malta. Such double taxation relief would generally be available in the form of an ordinary credit against the resident’s Malta income tax liability.

Additional Malta tax considerations

Malta does not levy any wealth taxes or estate or such other duties. However, duty may be chargeable in Malta upon any inter vivos or causa mortis transfer of immovable property or marketable securities. Duty payable upon a transfer of immovable property is generally chargeable at the rate of 5% whilst duty is typically chargeable at the rate of 2% upon a transfer of marketable securities.

Residence requirements

The Malta tax residency status of an individual would not be determined by reference to any specific or prescribed rules or formulae. Rather, such tax residency status remains essentially a question of fact – determinable in light of all circumstances relevant in the context of an individual’s presence in Malta. At any rate, in practice it is understood that an individual would be deemed to be resident in Malta should:

  • s/he actually reside in Malta at one or more times for a period equal in the whole to 183  days in a year; and/or
  • s/he be in Malta for a purpose which is not merely temporary; and/or
  • s/he be in Malta with an intention to establish her/his residence in Malta.

Tax registration

An individual taking up residence in Malta would be required to procure her/his registration with the local tax authorities. A resident individual may also seek issuance of a Certificate of Tax Residency. Such a certificate would be issued by the local tax authorities by way of confirmation of the relevant individual’s Malta residency status for tax purposes. As such, a certificate would be issued on the basis and in light of the abovementioned circumstances relevant in the context of the individual’s presence in Malta.