TAX BENEFITS
Permanent residents
For a more detailed outlook at the conditions please see Residing Permanently in Malta
The current scheme for foreigners who take up residence in Malta came into effect on January 1, 1988. This scheme is of particular interest to those nationals with a relatively high income, who are subject to a high tax rate in their present country of residence.
Under the scheme, an applicant who is not Maltese must either own assets outside Malta, worth not less than €349,410, or be in receipt of an annual income of not less than €23,294. There is no minimum stay requirement.
Conditions
The prospective new resident will be required to: remit to Malta at least €13,980 per annum, plus €2,329 per annum per dependent each year; purchase residential premises in Malta at a cost of not less than €104,509 for a an apartment or maisonette or €174,133 for any other type of residential property; or rent/lease the abode he lives in at not less than €4,193 per annum; not engage in gainful occupation in Malta. Limited gainful activities in Malta may be authorised.
Conditions
Holders of a residence permit under this scheme will be subject to tax on the chargeable income remitted to Malta at a flat rate of 15%. However, there is a minimum liability of €4,193 (Lm1,800) per annum. Remittances of a capital nature are not taxable.
Death/Succession duty
There is a 5% stamp duty payable on transmission of property. No capital gains tax is payable on the first sale after inheritance.
Property rates
There are no property rates, or property taxes in Malta. Profit on the sale of one’s residence is not subject to capital gains tax if sold after three years of ownership.
Business Benefits
Malta is internationally recognized as a brand denoting excellence in financial services. It offers an attractive cost and tax efficient base for financial services' operators looking for an EU-compliant, yet flexible domicile.
The Maltese fiscal regime has been one of the main drivers in creating an attractive environment for foreign investors. Since joining the EU in 2004, Malta has become an attractive jurisdiction for tax planning and corporate structures. An agreement with the EU preserves the competitive Maltese full-imputation system and has been deemed by the European Commission to be compliant with EU non-discrimination principles.
Malta is the only EU member state with a full imputation system of taxation in force. Shareholders are entitled to a credit for the company tax paid on distributed profits and will qualify for a refund when the credit exceeds their tax liability. Malta grants relief from double taxation under the credit method and includes not only treaty relief but also unilateral relief and the flat rate foreign tax credit, thereby ensuring that income arising from overseas is not subject to double taxation, even if there is no double taxation agreement in existence. Malta's double taxation treaty network extends to over 45 countries.
