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Taxation of Resident Non-dom Individuals in Malta

Find out the taxation rules that apply to non-domiciled residents in Malta.

It is impossible to miss out on its beneficial tax system when talking about Malta. Investors have confidence when setting up businesses in the country, and foreign nationals have many incentives to move here. Malta’s tax system is qualified as one of the most suitable for expats in Europe.   

This article will help you understand the taxation of resident non-domiciled individuals in Malta and why it is one of the main factors of your residency.   

"Residence" and "Domicile" 

Before diving right into the taxation of “non-dom residents” or “resident non-doms” in Malta, it is essential to understand the difference between “residence” and “domicile.” These are two connecting factors that determine the extent of Malta’s taxing rights on an individual. 

“Domicile” is a concept inherited from the British legacy on Malta’s system. Typically, it refers to the place where a person has their permanent and indefinite home. An individual takes the domicile of the birthplace of his father. Unlike residency, you can have only one domicile at a particular point in your life.   

To change a domicile, a person must sever all ties with other countries. Domicile can also change under the operation of the law, e.g. an expat who married a domiciled person in Malta will automatically be considered domiciled in Malta. 

On the other hand, any place a person lives in is considered their “residence.” It is the place where they intend to live. The residence gives you the legal right to live, work, set up a business, travel, or study in the country. A resident in Malta for more than 183 days is considered a tax resident of Malta by default. A person may still be considered ‘ordinarily resident’ of Malta if residing for fewer than 183 days but is present in Malta for a consistent number of days over several years.   

Given these two statuses, how does Malta tax non-dom residents in the country?   

Malta’s Remittance Basis of Taxation 

Individuals who are both ordinarily resident and domiciled in Malta are taxable on their worldwide income and certain capital gains in Malta. However, individuals who are ordinarily resident but not domiciled in Malta are taxable in Malta on local source income and certain capital gains and on all foreign source income that is remitted to Malta. Therefore, any foreign source income not received in Malta will not be subject to tax. Foreign source capital gains will not be subject to tax whether received in Malta or not.    

Resident individuals are taxed in Malta according to the progressive rates of tax ranging from 0-35% depending on the income bracket. In addition, certain residents may benefit from a Special Tax Status and be taxed on the remitted income in Malta at a flat rate of 15%.   

The following programmes provide for a special tax rate for remitted income in Malta:  

Endevio, your Guide as a Non-dom Resident in Malta 

Malta welcomes foreign nationals who want to reside in the island nation. Malta’s programmes are very attractive for investors and entrepreneurs since Malta is deemed the ‘gateway to Europe.’ Malta is one of the few countries in Europe that tax non-dom residents at a flat rate of 15% on a remittance basis, which definitely makes it ideal.