information for global expats

Overview of Tax Issues for Expats in Malta

Submitted: April 2014

The Maltese tax year runs from the 1 January to the 31 December.

Tax Residence

If you are working in Malta for less than 183 days, you will be considered non-resident, and taxed at non-resident rates on Malta sourced income only. If you stay longer than 183 days but retain a domicile in another country, you will be considered resident but not ordinarily resident. As such you will be taxed at standard rates on Maltese-sourced income and any money you remit into Malta from overseas. If you settle in Malta on a long term basis, and have a habitual presence in Malta, you will become resident and liable for tax on your worldwide earnings. For more details, see: Taxation - Employment Taxation for Expats in Malta.

There is also a Global Residence Programme aimed at attracting high net worth individuals, who are not nationals of the EU, EEA or Switzerland, by offering a low rate of income tax of 15%. A guide to this programme can be found here.

Employment/Business Taxes

Income tax is deducted by your employer in the same way as it is in a country with a Pay As You Earn system. The marginal tax rate is 35%. In addition they will also deduct social security contributions of up to 10%. You may have to fill in a tax return after the end of the year to calculate the final amount of tax payable, depending on your circumstances. For more details, see: Taxation - Employment Taxation for Expats in Malta.

If you come to Malta to set up in business and start a company, you will be liable to corporation income tax on your trade or business profits. The general rate of corporation income tax is 35%, but there is a lower rate of 15% for certain self-employed persons. Companies must be registered with the Malta Financial Services Authority, and may have to apply for a trading licence. Companies must pay Advance Corporation Income Tax three times a year. After the end of the year a tax return must be produced within 5 months to 15 months of the year end, depending on the accounting year-end date of the company. For more details, see: Taxation - Business Taxation for Expats in Malta.

Other Taxes

In Malta investment income in the form of interest, dividends and royalties is taxed as ordinary income at the marginal rate. Tax on dividend income can be significantly reduced by Malta’s tax refund system. This system means shareholders are entitled to tax refunds on certain dividends they receive. Capital gains are also taxed as income with the exception of gains on most immovable property which is subject to a withholding tax on the final transfer value. For more details, see: Taxation - Investment Taxation for Expats in Malta.

Tax Treaties

Malta has signed tax treaties with over 60 countries worldwide. Malta does not charge withholding tax on dividends, interest or royalties paid to persons in other countries. The treaties mean that the amount of withholding tax charged by the originating country on money flowing into Malta is reduced. The amount that can be charged under a treaty is often reduced to 10% to 15%. For more details, see: Taxation – Tax Treaty Considerations for Expats in Malta.



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