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RELOCATING TO LIVE IN MALTA: COMPREHENSIVE GUIDE TO RESIDENCY AND TAXATION FOR INDIVIDUALS EU and NON-EU

 

 

TABLE OF CONTENTS for MALTA: COMPREHENSIVE GUIDE TO RESIDENCY AND TAXATION FOR INDIVIDUALS EU and NON-EU

 

  1. MALTA: COMPREHENSIVE GUIDE TO RESIDENCY AND TAXATION FOR INDIVIDUALS EU and NON-EU
  2. LONG-TERM RESIDENCE IN MALTA
  3. TEMPORARY RESIDENCE
  4. EDUCATION
  5. HOW TO TAKE UP RESIDENCE IN MALTA FOR EU CITIZENS
  6. ORDINARY RESIDENCE IN MALTA
  7. NON-DOM FISCAL RESIDENCE FOR NON-DOMICILED INDIVIDUALS
  8. INCOME TAXES
  9. Inheritance Tax
  10. RESIDENCE PROGRAMME
  11. HOW TO TRANSFER RESIDENCE TO MALTA FOR RETIREES
  12. SPECIAL RESIDENCE SCHEME FOR RETIREES IN MALTA EU and NON-EU
  13. SPECIAL SCHEME FOR UNITED NATIONS RETIREES
  14. MOVING TO LIVE IN MALTA FOR NON-EU CITIZENS
  15. ORDINARY RESIDENCE FOR NON-EU
  16. GLOBAL RESIDENCE PROGRAMME
  17. DIGITAL NOMAD PROGRAM
  18. ADVANTAGES FOR EU DIGITAL NOMADS MOVING TO MALTA
  19. MOVING TO LIVE IN MALTA: COMPLETE GUIDE TO RESIDENCE AND TAXATION FOR EU AND NON-EU PERSONS – CONTACT A MALTAWAY PROFESSIONAL

 

MALTA RESIDENCY TAXATION INDIVIDUALS MALTAWAY

MALTA RESIDENCY TAXATION INDIVIDUALS MALTAWAY

 

Malta is a small archipelago of 3 islands in the heart of the Mediterranean Sea and south of Sicily with approximately 542,000 inhabitants, of which at least a quarter are foreigners.

Malta is an ideal place to establish residency. In addition to its pleasant climate, safe environment, and hospitable English-speaking population, it offers a wide range of benefits to those seeking residency on the island, thanks to its advantageous tax regime and competitive cost of living. Any EU/EEA citizen or third-country national residing in Malta for more than three months must obtain a permit from the immigration authorities, which is granted for specific reasons, some of which are listed below.

Malta, the main island, has an area of 246 square kilometers, the neighboring Gozo 67 square kilometers, and the small Comino only 3 square kilometers, practically uninhabited but frequented by tourists for its crystal-clear waters and the splendid Blue Lagoon. The only hotel on the island of Comino is now closed and under reconstruction; therefore, it is not possible to stay overnight there except by boat or tent for the most adventurous.

I could talk at length about Malta, having lived here for more than 10 years, but I will limit myself to some key aspects and data.

 

The official language besides Maltese is English (thanks to nearly 250 years of British rule). Since 2004, Malta has been a member of the European Union and has adopted the euro since 2008.

 

Malta has a favorable climate with 300+ sunny days per year and winter temperatures that generally never drop below 10 degrees Celsius in the night, splendid sea, as well as a truly incredible historical and artistic heritage with its 7000 years of history that make visiting the small archipelago a continuous discovery alternating between natural and historical beauties.

The job market in Malta is very active and constantly growing, offering many job opportunities in various sectors and has one of the lowest unemployment rates in Europe.

It has a streamlined and very digitalized bureaucratic system and a tax regime that is very attractive in many respects.

For this reason, many decide to move to live on the island, so much so that 1/3 of the workers are not Maltese but foreigners, not to mention the continuous influx of tourism, which this year also recorded significant growth with over two million tourists and students coming to the island to study English.

 

Schengen Area (Uniform Schengen Residence Permit)

Malta joined the Schengen area in 2007. Non-EU citizens can obtain the Uniform Schengen Residence Permit, which is issued to those who demonstrate being a permanent resident. It guarantees the holder the possibility to travel within the Schengen area without having to apply for a visa for at least three months. To obtain the residence permit, the applicant must be a resident in Malta.

 

Double Taxation Relief

Residents in Malta are guaranteed protection from double taxation agreements, which ensure that tax is not paid twice on the same income in different countries. Malta has a wide network of double taxation treaties, and where there is no double taxation treaty, another form of double taxation relief provided for by national legislation, namely a unilateral exemption, largely achieves the same result.

 

LONG-TERM RESIDENCE IN MALTA

Long-term residence status can be granted to individuals who have regularly resided in Malta for five consecutive years. The term “consecutive” means that these individuals must not have been absent from Malta for more than six consecutive months in any given year of the aforementioned five-year period and, furthermore, during that period, must not have been absent from Malta for a total time exceeding ten months.

In addition, a third-country national who has obtained residence status from a member state other than Malta may reside in Malta for a period exceeding three months for the exercise of an economic activity as a subordinate or self-employed worker, provided that such person has a work permit, is pursuing studies or vocational training, or is engaged in other similar activities.

TEMPORARY RESIDENCE

Individuals staying in Malta for a temporary purpose and who do not intend to establish their residence here and who have not stayed in Malta for a period exceeding six months in a calendar year will not be taxed in Malta on their foreign income and profits, whether remitted to Malta or otherwise. They are also subject to Maltese taxes exclusively on income and gains derived from Malta.

EDUCATION

Temporary residence is granted for the entire period of education to students of any private school, College, or the University of Malta. If the student is a minor, their legal guardian can apply for residence in Malta to accompany them. This person must confirm that he or she has a stable and regular income and has suitable accommodation available.

 

HOW TO TAKE UP RESIDENCE IN MALTA FOR EU CITIZENS

ORDINARY RESIDENCE IN MALTA

If an EU or EEA citizen intends to reside and/or work in Malta for more than three months, they must register their residence with the Maltese government office competent for the Expatriates Unit of Identity. An eResidence document will be issued based on the purpose for which one decides to reside in Malta.

Ordinary residence in Malta requires individuals to physically stay on the island for a period of six months or more. There is no minimum requirement regarding the value of the property for non-residents seeking ordinary residence in Malta, unless there is a need for an Immovable Property Acquisition Permit (AIP), which is applied for in specific circumstances.

There are several requirements by which EU/EEA citizens can obtain ordinary residence in Malta, including economic self-sufficiency, employment, education, and starting a business. The most common ones are outlined below:

Economic self-sufficiency: This criterion requires that such individuals demonstrate that they are able to provide for themselves and their dependents, being financially stable and not in need of any financial support from the Maltese government. They also need health insurance.

Employment: A second requirement by which EU/EEA citizens can obtain ordinary residence in Malta is employment. Therefore, the applicant must accept job offers or seek employment in Malta, work in Malta as an employee or self-employed person. Alternatively, the applicant may choose to open a business in Malta and work for themselves.

 

NON-DOM FISCAL RESIDENCE FOR NON-DOMICILED INDIVIDUALS

Malta enjoys a territorial tax regime very different from worldwide taxation. This allows individuals who decide to move to live on the archipelago and who are residents but not domiciled (Maltese citizens and those who obtain permanent residence in the territory are excluded) to benefit from the advantageous tax system for non-domiciled individuals or non-doms.

Individuals who are habitually resident but not domiciled in Malta are subject to income tax on income generated in Malta, on income generated outside Malta but remitted to Malta, and on gains generated in Malta. No tax is payable on gains generated abroad but remitted to Malta.

Therefore, a non-Maltese citizen, for example, an Italian citizen who transfers residency to Malta, in compliance with the relevant regulations, without the aforementioned intention to consider it as ‘home’ permanently, acquires the status of non-domiciled resident, also known as NON DOM.

 

As a NON DOM RESIDENT in Malta, they will pay taxes on:

  • income in any form generated in Malta and on capital gains produced there
  • income from foreign sources only if transferred to Malta

As a NON DOM RESIDENT in Malta, they will not pay taxes on:

  • income generated abroad and not remitted to Malta
  • capital gains produced abroad and partially or totally transferred to Malta.
  • ’clean capital’’ remitted to Malta

 

INCOME TAXES

Individuals who are habitually resident but not domiciled in Malta are subject to income tax on income generated in Malta, on income generated outside Malta but remitted to Malta, and on gains generated in Malta. No tax is payable on gains generated abroad but remitted to Malta.

Personal income tax is levied at progressive rates ranging from 0% up to a maximum of 35%.

Here are the effective tax rates in 2024:

 

TAX RATES
           Chargeable Income (€)            From                          To                          Rate       Subtract 
Single Rates
09,1000%0
9,10114,50015%1,365
14,50119,50025%2,815
19,50160,00025%2,725
60,001and over35%8,725
Married Rates
012,7000%0
12,70121,20015%1,905
21,20128,70025%4,025
28,70160,00025%3,905
60,001and over35%9,905

 

 

Inheritance Tax

No inheritance tax or death duty is payable in Malta. However, a duty on documents and transfers is payable by the heirs of the deceased or by the buyer of real estate located in Malta and on the acquisition of securities in companies in Malta. Nevertheless, no transfer tax is payable on transfers of securities made by shareholders or commercial companies with business interests, outside of Malta, of over ninety percent. Likewise, exemption from transfer taxes on securities in holding companies exists when more than half of the ordinary share capital, voting rights, and profit rights are held by persons who are not resident in Malta. Subject to certain exceptions, the tax is payable at a rate of 5% in the case of real estate and 2% if it concerns securities.

 

 

RESIDENCE PROGRAMME

 

The Residence Programme (TRP)” is a program aimed at attracting EU, EEA, or Swiss citizens who are not permanent residents in Malta.

 

The applicant must purchase or rent a property in Malta or Gozo that must serve as their main residence with a minimum value in Malta of €275,000 or in the south of Malta or Gozo of €220,000. Alternatively, renting at a minimum annual rent is €9,600 if the property is located in Malta and €8,750 if the property is located in Gozo or the south of Malta. (Maltaway’s partner is on the list of authorized representatives).

 

The applicant must:

 

  • have sufficient resources to live
  • have valid health coverage
  • Pay a government fee of €6,000 to access the facilitated regime
  • pay tax at 15% with a minimum annual payment of €15,000 on foreign income transferred to Malta.

 

HOW TO TRANSFER RESIDENCE TO MALTA FOR RETIREES

 

As retirees, you can decide to transfer your residence to Malta by submitting an application according to the ordinary rules. If you then decide to transfer your pension under a tax exemption regime (i.e., in cases where possible, generally for INPS retirees and not for public retirees, the pension is transferred gross and taxed in the new country of residence), the rules of ordinary taxation with tax brackets ranging from 0 to 35% will apply to it (a tax rate reduced compared to Italy in any case).

It is also possible to move to live in Malta and request the application of a special facilitated regime at 15% to your gross pension.

 

SPECIAL RESIDENCE SCHEME FOR RETIREES IN MALTA EU and NON-EU

 

In 2012, then amended in 2014, new rules were introduced in MALTA with the Malta Retirement Programme – for RETIREES who are EU/EEA/Swiss citizens (excluding Maltese citizens) but also for NON-EU citizens that guarantee a favorable tax condition:

 

  • Fixed rate of 15% on any foreign source of income received in Malta, by them or by their dependents, subject to a minimum annual tax of €7,500 and an additional €500 for each dependent family member and home assistant.

 

The main conditions are:

  • receive a foreign pension that must be received in Malta and must constitute at least 75% of the beneficiary’s taxable income.
  • purchase or rent a property in Malta or Gozo that must serve as their main residence with a minimum value in Malta of €275,000 or alternatively in the south of Malta and Gozo of €250,000. Alternatively, renting at a minimum annual rent is €9,600 if the property is located in Malta and €8,750 if the property is located in the south of Malta or Gozo.
  • have health insurance
  • be present in Malta for at least 90 days per calendar year, calculated over a period of 5 years. In addition, they cannot remain in any foreign jurisdiction for more than 183 days per year
  • Payment of a government fee of €2,500, by submitting a specific application to the competent Authority through an authorized representative (Maltaway’s partner is on the list of authorized representatives).

 

SPECIAL SCHEME FOR UNITED NATIONS RETIREES

 

There is also a special scheme that provides for the granting of a “special tax status” to persons who are neither permanent residents nor long-term residents in Malta and who receive a pension from the United Nations or a widow’s/widower’s benefit of which at least 40% is received in Malta. (Maltaway’s partner is on the list of authorized representatives).

 

MOVING TO LIVE IN MALTA FOR NON-EU CITIZENS

 

ORDINARY RESIDENCE FOR NON-EU

 

Obviously, the concept of residence for European citizens is accompanied by the right to free movement of persons within the European area, while in the case of emigration to a non-EU country or for non-EU citizens who want to enter Europe, the situation becomes more complex and linked to obtaining visas or permits. Non-EU citizens can obtain a residence permit if they meet the specific conditions required for each type of permit:

 

  • for employment
  • for family reunification
  • for study, research, or volunteering purposes
  • as self-sufficient
  • for long-term stays
  • for international protection or other types of protection

GLOBAL RESIDENCE PROGRAMME

 

The Global Residence Program entitles non-EU citizens to obtain a residence permit in Malta through a minimum investment in property in Malta. Once obtained the residence permit under this scheme, applicants can live in Malta stably and also have the right to travel to any country within the Schengen Area without the need for any additional visa. (Maltaway’s partner is on the list of authorized representatives).

Requirements: Real Estate: Candidates who are not citizens of the EU/EEA/Switzerland are required to own or rent property in Malta. This “qualifying real estate” must have been purchased after 2014 for a minimum value of €220,000 in Gozo and the South of Malta, and €275,000 in general in Malta, and must be used by the applicant and any dependents as their habitual residence.

Alternatively, the applicant may choose to rent property in Gozo and the South of Malta for a minimum of €8,750, while in general in Malta for a minimum of €9,600 per year.

Financial resources and insurance: The applicant must not already be a beneficiary of the regulations of the residence scheme or the regulations for highly qualified individuals.

The applicant must have stable and regular resources sufficient to maintain themselves, as well as all dependents, in addition to having adequate health insurance for themselves and for all persons for whom accompanying care service is provided, with coverage in the EU territory.

The individual must pass a “test of integrity and professionalism” in order to obtain a permit under this scheme.

Tax treatment: A 15% tax rate is applied to foreign income remitted to Malta with the possibility of claiming double taxation relief. The minimum annual tax amounts to €15,000 plus €2,500 for each dependent, from the date of application for any double taxation relief. Subsequent taxable income of the beneficiary (and that of the spouse) that is not taxed at the special rate of 15% will be taxed at 35%.

The beneficiary of this scheme and their spouse cannot opt for separate tax calculations. A government administrative fee of €6,000 is collected.

Constraints: The applicant must not be a person benefiting from other programs.

DIGITAL NOMAD PROGRAM

 

Malta, as other countries have already done, launched on 2.6.2021 a new temporary residence program for digital nomads or Nomad Residence Permit who want to move to the archipelago to work remotely.

The NOMAD program allows citizens of third countries, i.e., NON-EU, including family members, who want to move to the island, to obtain a one-year visa, renewable 3 times for a stay of up to 4 years. It is required that the digital nomad has:

 

  • a valid document
  • a remote job as an employee of a company abroad or a business activity with a foreign company or as a freelancer or consultant with contracts with clients who have a stable organization abroad
  • a minimum gross income of €42,000, increased in case of addition of family members
  • a rental or purchase contract for a property in Malta
  • health insurance

 

The permit for digital nomads allows, therefore, to maintain a stable job abroad and to obtain a visa and a legal residence permit in Malta in a short time.

The work incomes of nomads will therefore be taxed only in the country of origin and will not be subject to further taxation in Malta. (much better than in Italy where is taxed even locally)

The cost of the visa is only €300 for the applicant and €300 for each additional family member.

 

ADVANTAGES FOR EU DIGITAL NOMADS MOVING TO MALTA

 

Being a digital nomad in Malta has many attractive points also for citizens of European countries who, taking advantage of the free movement within the member states, can obtain a residence permit in Malta according to the ordinary rules without the need for visas. Transferring one’s residence from a digital nomad to the Maltese archipelago means:

 

  • taking advantage of tax benefits with lower taxation compared to many other countries
  • the validity of the non-dom tax regime instead of worldwide taxation
  • a streamlined bureaucratic system
  • a technological and computerized system
  • a country with a large international community
  • a country where English is the official language
  • a favorable climate with many sunny days.

 

The number of digital nomads is certainly destined to rise.

Despite what is read about the phenomenon of digital nomads, of those who, having an online job, can decide to travel the world and work wherever they are, this does not mean not having a tax residence and not paying taxes in any country. On the contrary, this choice poses many legal and tax problems, with the risk of dual residences as, in wandering and staying in different countries, different States with different rules on residence and different legal and tax regulations are involved.

Do not be attracted by headlines or what is advertised on social media.

The various programs launched for digital nomads in different countries must be studied in detail as they require specific requirements and present different tax benefits sometimes limited to certain types of income.

In any case, transferring residence to a foreign country requires specific study with a complete legal and tax analysis of the destination country and the country of origin and citizenship and personalized advice from experienced professionals.

 

MOVING TO LIVE IN MALTA: COMPLETE GUIDE TO RESIDENCE AND TAXATION FOR EU AND NON-EU PERSONS – CONTACT A MALTAWAY PROFESSIONAL

For any clarification, advice, legal opinion, support for procedures and residence applications, including special taxation schemes, such as that for Pensioners, do not hesitate to contact us, Maltaway professionals make their ultra-thirty-year International Practice available to you.

The advice of an expert in the field can help you to solve all doubts and understand all the CONSTRAINTS, implications, advantages, and disadvantages compared to your origin and country of residence situation and to choose consciously before considering a transfer.

 

 

CONTATCTS MALTAWAY