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Employment Taxation for Expats in Malta

Submitted: April 2014

Maltese eResidence Document

If you intend to stay in Malta for longer than 90 days you must apply for an eResidence document at the Department for Citizenship and Expatriate Affairs. The Department address is:

Evans Building, St Elmo’s Place, Valetta.
Tel: 25904800 or 25904801.

Applications in person can be made between 8.30am and 3.30pm (8.00am and 12.00 in summer).

Two forms are required; an identity registration form ID1A, and a CEA form; there are various kinds, depending on your reason for applying for residence. In addition you must supply an authenticated photograph or photocopy of your passport. A document containing FAQs regarding residence, and the necessary forms, can be downloaded from here

You may also need an employment licence. Information regarding these is available here.

Working for an employer

Malta uses a Pay As You Earn (PAYE) for collecting income tax from employees. Under PAYG your employer deducts tax from each wage or salary payment. How much tax you pay will depend on whether you are considered resident or non-resident. Generally if you are stay in Malta for less than six months you will be considered non-resident. For more information on residence see Taxation - Overview of Tax Issues for Expats in Malta.

The following table shows the tax rates for single residents:

Income (€)

Rate

Up to 8,500

0%

From 8,501 to 14,500

15%

From 14,501 to 19,500

25%

From 19,501 to 60,000

29%

Over 60,000

35%


The following table shows the tax rates for non-residents:

Income (€)

Rate

Up to 700

0%

From 701 to 3,100

20%

From 3,101 to 7,800

30%

Over 7,800

35%


In addition you will have to pay social security contributions which are graduated up to a maximum of 10%.

If your only income is from employment in Malta, and it has been taxed at source by your employer, you should not have to fill in a tax return at the end of the year. You should receive a tax statement at the end of the year. If you check this and find it is incorrect, you challenge it within 30 days of receipt.

If you have other sources of income other than from employment, you will have to complete a tax return and file it before the 30 June.

Working as self-employed

Before beginning work as a self-employed person, you will have to register with the following organisations:

  • Employment and Training Centre, whose website is here.
  • Inland Revenue Department, whose website is here.

You may also have to register with the VAT Department whose website is here. You may also have to register with the Commerce Department to obtain a trade licence, their website is here.

If you are self-employed, you will be liable for income tax at the same rates as those in the tables above. The income tax is based on your net income after allowable business expenses. If you only work part-time you may be able to pay tax at a flat rate of 15%, there is information available on this here. You will generally have to pay provisional tax three times a year on the basis of what you earned in the previous year. After the end of the year you will have to complete a tax return and pay a final settlement tax or request a refund on any outstanding amounts.

 

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