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An Overview of Malta Tax Residency

It is a common misconception that Malta residency and Malta tax residency are the same. Learn the differences and understand Malta’s taxation system

Being a resident in Malta is different from being a Tax Resident in Malta. Since tax in Malta is based on domicile, not on residency or citizenship, Malta Tax Residency is an option for reduced tax on income remitted to the country.

The 183 days rule denotes the maximum number of days you can be physically present in a country. After that, your income tax liability comes into place. Generally, individuals who spend more than six (6) months in Malta in a calendar year are likely to be Maltese tax residents.   

Tax residency in Malta is a facts-based test, and the following factors are usually taken into account to determine the residency of individuals:   

  • Place of abode;   
  • Physical presence, i.e., > 183 days;   
  • Regularity and frequency of visits;   
  • Intention to reside in Malta;   
  • Ties of birth;   
  • Relations of the family; and   
  • Business ties.   

Tax treaties usually solve issues of dual residence. If you cannot determine your tax residence, it is ideal to consult with a tax advisor.  

Tax Residency Certificate VS Tax Status

On the one hand, you may apply for the Tax Residency Certificate and the Maltese tax authorities will issue it yearly. You have to be physically present in Malta for the issuance of this certificate and provide the following documents:   

  • Proof of Utility Bills (water and electricity);   
  • Bank Transactions (money spent in Malta); and    
  • Rental/Purchase agreements.   

These shall prove that you have been a tax resident in Malta for a particular year.   

On the other hand, the tax status is given to you through the Malta Residency schemes and programmes. Your income is treated under the source and remittance basis of taxation. Capital gains outside Malta, even if received in Malta, is still not taxed in Malta. 

Tax for Expats in Malta   

The taxation of an individual’s income is progressive in Malta. To attract highly qualified personnel from other countries, Malta has introduced an incentive scheme targeting foreign executives.    

Professionals in the financial services, gaming and aviation sectors can benefit from a flat personal income tax rate of 15% on income up to €5 million. Any income over that figure is tax-free.   

To qualify for the Expat Tax Incentive, the employee must earn a minimum of €85,016 per year, among other criteria.  

EU nationals can benefit from the reduced tax rate for an unlimited period, EEA and Swiss nationals for ten (10) years, and third-country nationals for four (4) consecutive years. 

The Malta Global Residence Programme (MGRP)

The Malta Global Residency Programme (MGRP) is residence scheme in Malta that offers a special tax status in the country. Non-EU/EEA/Swiss nationals are subject to a minimum annual tax payment of €15,000 and the possibility of claiming double taxation relief.  

You can apply for the MGRP to purchase high-value property in Malta and benefit from a special tax status and Malta residence permit. Take note that the residence permit comes from a separate programme.  

Related: The Malta Permanent Residency Programme (MPRP)