Accountants, auditors, advisors in Malta
ECOVIS Malta
55B, Birbal Road
Balzan BZN9017
Malta
Phone: +356 21341680
Fax: +356 21341681
Email: malta@ecovis.com

Relocating to Malta – A Tax Analysis

(An Update – July 2016)

Relocating to Malta can be beneficial for a number of reasons. Malta is an attractive immigration location, boasting of a typical Mediterranean climate, rich culture and a notable history. Moreover the legislator has long regarded the tax treatment of expatiates as a means of attracting investment to Malta and recent years have seen quite a number of developments relative to expatiates.

Who is subject to tax in Malta?

Persons who are ordinarily resident and domiciled in Malta are taxed on a worldwide basis;
Persons either resident or domiciled in Malta are taxed on a Malta source basis & on a remittance basis;
Persons who are neither resident nor domiciled in Malta are subject to tax in Malta on a Malta Source Basis.

Income Tax Rates

(as of 1st January 2016)

Resident – Single Rates

Chargeable income Rates of tax
€0 – €9,100 0%
€9,101– €14,500 15%
€14,501 – €60,000 25%
Over €60,000 35%

Resident – Married Rates

Chargeable income Rates of tax
€0 – €12,700 0%
€12,701 – €21,200 15%
€21,201 – €60,000 25%
Over €60,000 35%

Resident – Parents Rates

Chargeable income Rates of tax
€0 – €10,500 0%
€10,501 – €15,800 15%
€15,801 – €60,000 25%
Over €60,000 35%

Non-resident rates (Married or Single)

Chargeable income Rates of tax
€0 – €700 0%
€701 – €3,100 15%
€3,101 – €7,800 25%
Over €7,800 35%

Highly Qualified Persons Rules

A non-domiciled individual who derives income from a qualifying contract of employment received in Malta or outside Malta in respect of work or duties carried out in Malta, may opt to have the said income charged at 15%. Qualified individuals must be related to entities licensed and/or recognized by the Malta Financial Services Authority, companies licensed by the Malta Gaming Authority and undertakings holding an Air Operators’ Certificate or an Aerodrome Licence issued by the Authority for Transport in Malta. An applicant would be required to apply with the respective Authority, for a formal confirmation of eligibility to the programme. The programme is available for 10 consecutive years for EEA/Swiss nations and for 4 consecutive years for third country nationals. This term commences in the year in which the recipient is first liable to income tax in Malta.

Employment income – 15%
Any other income – 35%
Over €5,000,000 not subject to tax
Capital gains (even if remitted) – 0%
Minimum annual income – €82,353 (excluding the annual value of any fringe benefits)

Qualifying Employment in Innovation & Creativity Rules

Expatriates working in Malta engaged in the development of innovative and creative digital products may opt to have their employment income taxed at a flat rate of 15%. The individual’s minimum annual salary in terms of the qualifying contract of employment must be at least €45,000 excluding any fringe benefits. The individual must apply with the Malta Enterprise Corporation, which must be satisfied that the individual performs the activities of an eligible office.

Employment income – 15%
Any other income – 35%
Capital gains (even if remitted) – 0%
Programme is available for 3 years

Global Residence Programme & Residence Programme Rules

An expatriate, in receipt of income arising outside of and remitted to Malta, may opt to have his foreign source income charged at a flat rate of 15%. The applicant must not reside in any other jurisdiction for more than 183 days in any calendar year and must hold a qualifying property in Malta, i.e. property of at least €275,000 if in Malta or €220,000 if in Gozo or south of Malta, or rent such property for a minimum rent of €9,600 annually if in Malta, €8,750 if in Gozo or in the south of Malta. The beneficiary must occupy such property as his primary residence.

Remitted income – 15%
Any other income – 35%
Capital gains (even if remitted) – 0%
Minimum tax payable – €15,000

Malta Retirement Programme Rules

This programme is designed to attract nationals of EU, EEA and Switzerland, who are in receipt of a pension income as their regular source of income, subject to a tax rate of 15% on any income received in Malta. The applicant must be in receipt of pension income, all of which is received in Malta and constitutes at least 75% of the beneficiary’s chargeable income. Once an individual is accepted under this programme, he must hold a qualifying property and reside in Malta for a minimum of 90 days a year averaged over any 5 year period and must not reside for more than 183 days in any other jurisdiction.

Pension income – 15%
Capital gains (even if remitted) – 0%
Minimum tax payable – €7,500 and an additional €500 for each of the individual’s dependants