Personal income taxation in Malta

Taxation in Malta for individuals with residence and domicile in Malta applies to worldwide income. In the case of persons which are either resident or domiciled in Malta, taxation focuses only over income obtained in Malta or remitted to Malta and on capital gains obtained in Malta. Income obtained outside Malta not remitted to Malta and the capital gains obtained outside Malta, irrespective of being remitted or not to Malta are only subject to a minimum tax of 5.000€/year.

The tax rate is a progressive rate, the maximum being 35%. Malta has been able to attract many expatriates during recent years by way of some rather favourable special regimes, which offer a 15% flat rate:

Residence Programme (EU/EEE/ Switzerland)

Individuals who are citizens of the EU (except Malta), the EEE or Switzerland and who are not domiciled in Malta, can apply to this programme and benefit from a special tax regime on income earned abroad and sent to Malta, at a flat rate of 15% with the possibility of using the mechanisms to eliminate international double taxation.

The following conditions and requirements must all be met:

• Are not domiciled in Malta;
• Are citizens of EU/EEE countries or Switzerland (not Maltese citizens);
• Receive regular and sufficient income to provide to themselves and to their families;
• Own or let a qualified immovable property in Malta; qualified immovable property is:
  • Purchase value >= € 275,000;
  • Lease annual value >= € 9,600;
  • The beneficiary occupies the property as his main residence;
  • The property is not shared with other individuals, relatives excluded.
• Hold a health insurance policy;
• Do not benefit from another special tax regime;
• Hold valid travel documents;
• Speak fluent Maltese or English;
• Are capable, reputable people;
• Pay a €6,000 registration fee.

Individuals who meet these requirements, and once they have obtained the respective status, are taxed at a 15% flat rate on the income obtained abroad and sent to Malta with the possibility of using the mechanisms to eliminate international double taxation. These individuals are subject to a minimum taxation in Malta of €15,000, which must be paid by 30 April every year at the latest.

Income obtained in Malta is taxed at the standard rate of 35%.

This special tax regime shall lapse if the individual:

• Obtains Maltese citizenship or that of a third country;
• Stops owning a qualified property;
• Obtains the status of “permanent resident” (pursuant to the Free Circulation of EU citizens);
• Stops being covered by health insurance or stops receiving stable income;
• If it is considered that their stay in Malta is not in the public interest;
• If they live in another jurisdiction for more than 183 days a year.

Global Residence Programme

Individuals who qualify under the Global Residence Programme (GRP) rules are taxable at the fixed rate of 15% on foreign source income remitted to Malta with the possibility of using the international mechanisms to eliminate double taxation. The individual will be subject to a minimum tax liability of € 15,000 payable by not later than the 30^th April.

Income obtained in Malta is taxed at the standard rate of 35%.

This Programme is available to individuals who, cumulatively:

• Is a third-country national (not an EU/EEA or Swiss national);
• Do not have a “long term resident” status of Malta;
• Did not legally and continuously reside in Malta for 5 years;
• Own or rent qualifying property in Malta; a property is considered as “qualifying” when:
  • Purchase value >= € 275,000;
  • Lease annual value >= € 9,600;
• Is not benefiting from other local individual schemes or programmes;
• Receive regular and sufficient income to support themselves and their family;
• Is in possession of a valid travel document;
• Hold adequate health insurance policy for themselves and their family;
• Is fluent in Maltese or English;
• Is a fit and proper person;
• Pay a registration fee of € 6,000.

The individual shall cease to possess this special tax status:

• If becomes a Maltese, EEA or Swiss national;
• If at any time does not hold the qualifying property;
• If becomes a “long term resident”;
• If at any time is not in possession of a health insurance;
• If his stay is not in the public interest;
• If stays in any other jurisdiction for more than 183 days in a calendar year.

Regime to attract highly qualified persons

Malta has created a special tax regime to attract highly qualified persons in order to increment 2 key areas for the development of the country: financial services and e-gaming. This regime provides that employment income is taxed at a fixed rate of 15% to individuals who, cumulatively:

• Are not domiciled in Malta;
• Obtain employment income in Malta in relation to the exercise of an eligible office position in a company licensed or acknowledged by regulators of the financial area or of the gaming area (MFSA or LGA) of at least € 75,000/year;
• Have the necessary qualifications or professional expertise;
• Receive regular and sufficient income to support themselves and their families;
• Reside in habitation considered adequate;
• Have a valid transport document;
• Hold a health insurance policy.

Work income is taxed at a fixed rate of 15% for a maximum of 5 years (EU/EEA/Switzerland citizens) or 4 years (other countries).