Liability to tax in Malta is primarily linked to an individual’s residence and domicile status. An individual is considered a Maltese resident when they are physically present in Malta for a period exceeding 183 days in a calendar year. The term domicile refers to an individual who resides permanently in Malta, is associated with the country as their permanent home and serves all ties with the country. For a more in-depth explanation of the two terms, the professionals at GCS Malta outline in detail in a previous article. 

When it comes to tax, individuals who are both resident and domiciled in Malta are subject to tax on a worldwide basis. It means that all income and capital gains arising in Malta or elsewhere are deemed to be subject to tax in Malta. Regardless of whether the foreign source income is remitted to Malta or not. Foreign capital gains are not subject to tax even if remitted to Malta. Though, individuals who are resident or domiciled in Malta are subject to tax on Malta source income and capital gains and a foreign source income received in Malta. 

For individuals who temporarily reside in Malta are only subject to tax on the income arising in Malta. The income tax on individuals is levied at progressive rates. The highest rate is 35%. The remittance basis of taxation for individuals subject to income tax in Malta are subject to an annual minimum tax payment of €5,000. It is applicable from the year 2018 if the individual receives foreign yearly income which does not amount to less than €35,000. The minimum tax of €5,000 shall not affect the minimum tax applicable to beneficiaries of a special tax status in Malta. 

Why GCS Malta?

GCS Malta has a team of dedicated, highly skilled professionals who cater to individuals’ and business’ needs. We can provide you with high quality, tailored advice that helps relieve the pressures associated with making complex tax decisions ensuring that you adhere both to best practice and tax law. It enables us to deliver practical advice, responsively. Get in touch today for more information.