Live a luxury life by living in the mediterranean sea. Enjoy Malta’s scenery all year round.
Have you ever dreamt of moving abroad to an English speaking Island in the middle of Mediterranean where crime is practically non-existent, the climate is pleasant throughout the year, the standard of living is high and the cost of living is reasonably low? You can stop dreaming now and start packing your bags.
Malta has been the ideal destination for several Nationalities that have head to the Mediterranean Island of Malta to take up residency and live a lifestyle that they have only ever day dreamed about. One of the great things about Malta is that the people are very hospitable and that, I must say, is in English which is rare to find. It is easy to get to know people and to understand the system in Malta. There is a sizable expatriate community made up of foreigners that are in Malta on work assignments, permanent residence holders, retiree’s as well as casual business travelers.
Malta enjoys several double taxation agreements. There are two types of Residence status that one may take up in Malta. In both cases, one must buy a property in Malta or you must rent a property Malta and reside in Malta for a minimum of 183 days. Purchasing a property in Malta is fairly easy and being that the property market has not been as affected by the global financial crisis it is still interesting to investigate although the opportunity to rent a property in Malta is also appealing due to the very high standards of furnishing and finishings of property.
Individuals residing in Malta are taxable only on income arising and/or remitted to Malta at the applicable rates depending on the residence status one has opted for.
One may take up residence in Malta by obtaining a certificate from the Inland Revenue Department, which certificate is issued for an indefinite period as long as certain conditions are satisfied on an annual basis. Holders may therefore reside indefinitely in Malta and may enter and leave Malta as and when required without the need of any other formalities.
The following is a list of incentives and advantages applicable to holders of a certificate in terms of the Residents Scheme Regulations:
Dividends |
Interest |
Royalties |
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Minority |
Minority |
% required |
Non Treaty |
Rates |
Non Treaty |
Rates |
Non Treaty |
Shareholding |
Shareholding |
to qualify for |
|
|
|
|
|
rates |
rates |
Majority |
|
|
|
|
|
|
|
Shareholding |
|
|
|
|
|
5% |
5% |
N/a |
0 |
10% |
0 |
10% |
12q |
One must own worldwide capital of at least €349,000 (or equivalent) or have an annual income of not less than €23,000 (or equivalent) arising outside Malta. The permit holder is also required to remit €13,950 per annum (plus €2,300 for each dependant, including the spouse) into Malta. The minimum remittances must not be repatriated out of Malta.
Furthermore, a holder of a Residents Scheme certificate is required to purchase or lease property in Malta, having the following minimum values:
All the above documents must be certified by a Notary and apostilled by the Ministry of Foreign Affairs in the country of nationality.
The issue of a certificate typically takes around three months from the date of the application. The minimum amount of tax shall be payable within thirty days of approval of the application and shall be credited against the tax due for the first year of residence. The holder of a permit must take up residence within 12 months from the issue of the said permit.
Non EU citizens are required to have their passport endorsed with the residence stamp. This is obtained by filing an application with a separate department, which stamp is valid for a period of one year and may be renewed on an annual basis as long as the annual conditions on the residence permit certificate have been fulfilled. A fee of €23.29 is payable to the respective department on submission of the application.
An individual may also take up residence in Malta by declaring his intention within three months of arrival in Malta and must complete and submit a form with the relevant authority.
An individual who is economically self-sufficient must prove to the authorities that he or she is in receipt of an annual income of €23,000 if married and €14,000 if single.
An individual may also become a resident of Malta as a consequence of taking up employment in Malta. A foreigner taking up such employment would require employment permission, which would be applied for by his employer.
For tax purposes an individual is normally regarded as being resident in Malta for a particular year if, in that year, his stay in Malta exceeds 183 days.
The applicable income tax rates are, however, the normal rates of income tax applicable to residents, which are as follows:
‘Married’ Rates |
‘Single’ Rates |
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First |
€ 11,900 |
Nil |
First |
€ 8,500 |
Nil |
|
Next |
€ 9,300 |
15% |
Next |
€ 6,000 |
15% |
|
Next |
€ 7,500 |
25% |
Next |
€ 5,000 |
25% |
|
Over |
€ 28,700 |
35% |
Over |
€ 19,500 |
35% |
Non EU citizens are required to have their passport endorsed with the residence or employment permit stamp depending on the purpose of residence. This stamp is obtained by filing an application and is valid for a period of one year and may be renewed on an annual basis. A fee of €23.29 is payable to the respective department on submission of the application.
Non Residents
An individual who is in receipt of income arising and/or remitted to Malta however does not reside in Malta is subject to such income at the nonresident rates as follows:
First |
€ 700 |
Nil |
Next |
€ 2,400 |
20% |
Next |
€ 4,700 |
30% |
Over |
€ 7,800 |
35% |
Non EU Citizens may import their household effects into Malta free of VAT and import duties. For non-EU citizens Customs may initially require either a deposit or a bank guarantee for the amount of VAT/duty in question. Upon the expiry of 200 cumulative days stay in Malta, any such deposits or bank guarantees are refunded or cancelled, provided that the duration of stay can be proved upon request.
Inheritance and capital transfer tax
There is no general inheritance tax system in Malta. However, upon the transfer or transmission (upon death) of:
Identity Cards
Non EU residents in Malta may apply for an identity card only once they have obtained the stamp on their passport. A Maltese identity card is obtained by completing an application with the relevant authority. A Maltese identity card is not a travelling document for foreigners, however it may be found useful for applying for various services in Malta such as television, telephone, banking and other services.
If your interested in seeking further advise contact one of our RE/MAX office’s and we will be able to assist you in purchasing a property in Malta and will also provide you with a list of recommended tax consultants for you to choose from.
Household Effects Married couples may also opt for “single” rates individually on certain income.