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Income in this category includes:
In Malta, interest income is generally taxed as ordinary income irrespective of its origin. Interest received by residents from local banks, listed companies or government bodies is taxed at 15%. With regards to interest income received from outside Malta, if the country of origin of interest payments has a suitable tax treaty with Hong Kong, the amount of tax that can be charged by the country of origin is generally reduced to between 10% and 15%. A link to each Maltese treaty in force can be found here.
Rental income is as ordinary income after deductions including bank interest, license fees and ground rents payable. Once these deductions have been taken into account there is an additional deduction for maintenance of 20% of the net rent.
In Malta, dividend income is taxed as ordinary income. To avoid double taxation on income earned by the company and paid out in the form of dividends, the amount of tax already paid by the company is credited in full to the shareholder’s personal tax liability. This is called dividend imputation. In addition shareholders can be entitled to tax refunds when they receive dividends, depending on the type of taxed income the dividends are paid out from at the company level. Generally the refund system can result in a tax rate of between 0% and 10%. There is a guide called Tax System for Companies Resident in Malta available as a pdf from this search.
Overseas dividends may be taxable in the country of origin, however if the country of origin of dividends has a suitable tax treaty with Malta, the amount of tax that can be charged by the country of origin can often be reduced to between 10% and 15%. A link to each Malta treaty in force can be found here. The section dealing with dividends can usually be found half way through the treaty document.
Capital gains made on such things as shares, copyrights, patents and trademarks are taxed as ordinary income. There is no taxable capital gain on the sale of your home as long as it has been held for three years. Generally sales of property generate a withholding tax of 12% on the transfer value. Under certain circumstances taxpayers can elect for the gain to be taxed as ordinary income. There is a guide to tax on property transfers here. Non-residents are exempt from capital gains made on the sale of shares in a Maltese company provided the company is not a property company.
Pension payments that are Malta based are taxed as income. Malta has a special scheme for European nationals who transfer their pensions to Malta which results in a fixed rate of income tax of 15%. There are some conditions attached which are described here.
Sections in TAXATION IN MALTA:
» Overview of Tax Issues for Expats in Malta
» Employment Taxation for Expats in Malta
» Business Taxation for Expats in Malta
» Investment Taxation for Expats in Malta
» Tax Treaty Considerations for Expats in Malta
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If you are considering moving to Malta or are soon to depart, you can find helpful information and advice in the Expat Briefing dedicated Malta section including; details of immigration and visas, Maltese forums, Maltese event listings and service providers in Malta.
From your safety to shopping, living in Malta can yield great benefits as well as occasional drawbacks. Find your feet and stay abreast of the latest developments affecting expats in Malta with relevant news and up-to-date information.
Working in Malta can be rewarding as well as stressful, if you don't plan ahead and fulfill any legal requirements. Find out about visas and passports, owning and operating a company in Malta, and general Maltese culture of the labour market.
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