Introduction to Malta’s Personal Taxation System
The basis of taxation for individuals in Malta depends on an individual’s residence and domicile status. The term resident, when applied to individuals usually refers to an individual who resides in Malta except for such temporary absences as are deemed reasonable and not inconsistent with the claim of such individual to be a resident in Malta.
In general, individuals are considered as resident in Malta when they are physically present in Malta for a period exceeding 183 days in a calendar year. The term ‘domicile’ is not defined in the Malta Income Tax Act but usually refers to the intention that a person may have to reside permanently in Malta and is generally associated with the country in which an individual has his permanent home and typically severing all ties with other countries.
On the other hand, persons who are a resident but not domiciled in Malta, should be subject to tax in Malta only on Malta source income and on foreign income remitted to Malta.
Also, with effect from the basis year 2018, a person who is long-term resident, or holds a permanent residence certificate or a permanent residence card, will no longer be subject to income tax in Malta under the remittance basis of taxation but will become taxable in Malta on his/her worldwide income.
With effect from the basis year 2018, persons subject to the remittance basis of taxation are subject to a minimum tax of €5,000 per annum subject to certain conditions.
If you are trying to understand the Personal Taxation System in Malta in detail, then this is the article for you.
Here, we will try and explain everything that you need to know about taxation in Malta for individuals.
Malta Personal Income Tax Rates
The tax rates applicable to individuals subject to tax in Malta depend on whether the individual is deemed to be resident in Malta or otherwise.
Resident Tax Rates in Malta
Malta implements three different tax rates for individuals resident in Malta, namely
Single Rates of Taxation;
Married Rates of Taxation applicable to married couples who opt for a joint tax computation; and
Parent Rates of Taxation is applicable to individuals who maintain a child below the age of 18 years (or 23 years if the child is attending tertiary education) and who is not gainfully occupied earning more than €3,400 per annum.
Tax Rates in Malta
Tax Rates for Residents in Malta
Chargeable Income (€)
From To Rate Subtract (€)
Non-Residents Tax Rates in Malta
Taxpayers who are not resident in Malta for income tax purposes are subject to the following tax rates on their income arising in Malta:
Tax Rates for Non-Residents in Malta
|Chargeable Income (€)|
|From To Rate Subtract (€)|
Payment of Tax in Malta
The payment of Personal Tax can be mainly carried out by three systems, namely:
The Provisional Tax system;
The Final Settlement System (FSS); or
By means of the Self-Assessment.
The FSS (Final Settlement System)
Other Tax payments under the Self-Assessment Taxation System
Social Security Contributions in Malta
Special Programs for individuals relocating to Malta
The Malta Residence Program
"The Residence Program (TRP)" is designed to attract individuals who are not permanent residents of Malta but are nationals of the EU, EEA or Switzerland. Beneficiaries of TRP benefit from a flat rate of taxation on foreign income remitted to Malta of 15%.
The Malta Global Residence Program
The Malta Retirement Program
The Malta Highly Qualified Persons Rules
This program is designed to attract highly qualified persons occupying an eligible office with the financial services, gaming and aviation industry and assisted reproduction technology to Malta. Beneficiaries of this program benefit from a flat rate of taxation at 15% on employment income derived from an eligible office up to a maximum income of €5,000,000.
Inheritance Tax in Malta
Malta does not levy inheritance tax however the causa mortis transfer of shares in Maltese companies and immovable property situated in Malta are subject to stamp duty.
The causa mortis transfer of immovable property in Malta is subject to stamp duty by the transferee at the rate of 5% on the market value of the property at time of transfer.
The causa mortis transfer of shares in Maltese companies is subject to stamp duty at the rate of 2% of the market value of the shares transferred or at the rate of 5% if the company owns immovable property situated in Malta.
Certain transfers of shares in Maltese companies may be exempt from stamp duty.