Ordinary Residence

Malta’s right to tax an individual’s income is determined on the basis of source or residence. All income arising in Malta is, save for a few exceptions taxable in Malta irrespective of residence. An individual is usually considered to be resident in Malta for tax purposes if he spends, in aggregate, more than 183 days in any calendar year. Individuals who visit Malta regularly may also be considered to be ordinarily resident in Malta despite not satisfying the 183 day rule.

While individuals who are both resident and domiciled in Malta are taxable on their worldwide income, resident individuals who are not Maltese domiciled are subject to tax only on income (including capital gains) arising in Malta and income (excluding capital gains) arising abroad which is remitted to Malta

This remittance basis of taxation which would apply to foreigners who take up residence in Malta can give rise to interesting tax planning opportunities.

Resident individuals would therefore be subject to tax on their chargeable income at progressive rates subject to a tax free bracket.
 

 

Highly Qualified Persons

Scheme intended to attract to Malta non Maltese domiciled individuals to occupy specific senior positions in the gaming, financial services and aviation sectors.

Individuals who satisfy the conditions laid down in these rules may, at their option, choose to be taxed at a flat rate of 15% on employment income derived from a qualifying contract of employment.

A beneficiary must satisfy the following conditions:

  • Derives employment income which is subject to tax in Malta in respect of work or duties carried out in Malta
  • Is protected as an employee under Maltese law
  • Is in receipt of regular and stable resources and resides in accommodation regarded as normal for a comparable Maltese family
  • Is in possession of a valid travel document and of sickness insurance
  • Is not Maltese domiciled
  • Has the necessary professional qualifications and at least 5 years professional experience
  • Has not benefited from deductions available to Investment Services Expatriates with respect to relocation costs and other allowable deductions in terms of Art.6 of the ITA

 

Minimum amount chargeable to tax:

  • Employment income subject to tax must be of at least €75,000 (adjusted annually in line with RPI) and net of any fringe benefits.
  • No tax is payable on employment income in excess of €5,000,000.
  • No possibility to claim relief for double taxation

 

Period during which benefit may be claimed:

  • EEA & Swiss nationals – 5 consecutive years
  • Third country nationals – 4 consecutive years

 

 

Game Director and Game Designers

Scheme intended to attract to Malta non Maltese domiciled individuals to occupy specific employment positions where the role involves the development of innovative and creative digital products.

Individuals who satisfy the conditions laid down in these rules may, at their option, choose to be taxed at a flat rate of 15% on employment income derived from a qualifying contract of employment.

A beneficiary must satisfy the following conditions:

  • Derives employment income which is subject to tax in Malta in respect of work or duties carried out in Malta
  • Is protected as an employee under Maltese law
  • Is in receipt of regular and stable resources and resides in accommodation regarded as normal for a comparable Maltese family
  • Is in possession of a valid travel document and of sickness insurance
  • Is not Maltese domiciled
  • Has the necessary qualifications or experience relevant to the role
  • In the case of third country nationals does not physically stay in Malta, in aggregate, for more than 1,460 days and does not acquire any real rights over immovable property situated in Malta

 

Minimum amount chargeable to tax:

  • Employment income subject to tax must be of at least €45,000 (adjusted annually in line with RPI) and net of any fringe benefits.
  • No tax is payable on employment income in excess of €5,000,000.
  • No possibility to claim relief for double taxation

 

 

Malta Retirement Programme

Period during which benefit may be claimed:

  • EU, EEA, Swiss & third country nationals – 3 consecutive years

This scheme applies to EU, EEA and Swiss nationals who are not in an employment relationship and who are in receipt of a pension this being their regular source of income. The conditions to be satisfied in order to benefit under this scheme include:

  • Owns property purchased for not less than €275,000 (€250,000 for property in Gozo) or rents property for an annual lease of at least €9,600 (€8,750 for property in Gozo)
  • The entire pension must be remitted to Malta and the pension must account for at least 75% of the individual’s Malta chargeable income for any particular tax year
  • Cannot engage in a trade/profession or be in employment but may hold non-executive posts on the boards of Maltese resident companies or partake in activities with entities engaged in philanthropic, educational or R&D work in Malta
  • Neither the individual nor his dependants can be beneficiaries under the Residents Scheme Regulations, High Net Worth Individuals Rules or Highly Qualified Persons Rules
  • Is not a Maltese or third country national
  • Is in receipt of regular and stable resources
  • Is in possession of a valid travel document and of sickness insurance
  • Is not Maltese domiciled and has no intention to become so domiciled within 5 years from application date
  • Is a fit and proper person
  • Has applied for registration certificate in Malta in terms of the Free Movement of EU Nationals and their Family Members Order
  • Resides in Malta for a minimum of 90 days averaged over any 5 year period and in any case does not reside in any other jurisdiction for more than 183 days in a calendar year

 

Tax Treatment:

  • 15% tax rate on foreign source income remitted to Malta (excluding capital gains even if remitted) subject to a minimum annual tax payable of €7,500 and €500 for every dependent & carer.
  • Possibility to claim treaty and unilateral relief
  • 35% tax rate on any other income not chargeable at the reduced 15% rate under these rules
  • Requirement to pay provisional tax in accordance with PT rules