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Taxation

Expatriates

Scope of Malta Taxation

Expatriates taking up residence in Malta on the permanent residence scheme may obtain a residence permit only by satisfying the following conditions:

  • Minimum annual income of not less than Lm 10,000 or equivalent, or own capital locally and abroad amounting to Lm 150,000 or equivalent

  • Remit to Malta an annual income of Lm 6,000. This is increased by a further Lm 1,000 for each dependent

  • Acquire property worth at least Lm 30,000 in the case of a flat or Lm 50,000 of a house or lease property at an annual rent of not less than Lm 1,800 per annum

  • Forbidden to be employed or engaged in any business in Malta.

Tax on foreigners having a permanent residence permit is levied at a flat rate of 15% on the income remitted to Malta, with a minimum tax liability of Lm 1,800 per fiscal year, after taking into consideration any double taxation relief. Returned migrants who have resided outside Malta for a minimum of 20 years are taxed at the rate of 15% on all income arising outside Malta and remitted to Malta, subject to a minimum of Lm 1,000. Double taxation relief or unilateral relief is granted for any foreign tax suffered. Furthermore, employment income or trading income arising in Malta is taxed at the Maltese resident rates however, the tax-exempt ceiling income is removed. Any other income arising in Malta is taxed at 15%. Finally, returned migrants are obliged to remit to Malta an amount of Lm 6,000 per annum, increased by Lm 1,000 for each dependant. Expatriates obtaining a working permit for more than 183 days are taxed on all income arising at normal income tax rates.

Expatriates working in Malta for a period less than 183 days are taxed.

Foreign entertainers performing in Malta for a period less than 15 days are subject to a final withholding tax of 10% on turnover. Other payments to non-residents are subject to a withholding tax of 25% which is not a final tax, the income is then subject to the non-residents tax rates.

Accommodation provided by the employer

Accommodation provided by the employer is taxable. The tax charge is on the utilities paid by the employer, plus the 'annual value' if it is owned or the rent paid if it is leased.

Social Security Contributions

Malta has reciprocal social security agreements with many countries under which employees may continue to pay the home country contributions for a specified period of time. The agreements can also provide for protection of benefits.

Employees working in Malta are subject to the Social Security Laws of Malta and furthermore if any employees of an undertaking in Malta are seconded to employment situated in any EU member state for 12 months or less, they are also subject to the Social Security Laws of Malta. However, if secondary employment extends for 12 months or less, the employee is subject to the Social Security Laws of Malta upon consent of the authorities of the member's state of secondary employment. The same rules apply for self-employed persons.