Malta Citizenship & Taxation

Pre-Immigration Tax Advice for Malta Citizenship Applications

Dr. Jean-Philippe Chetcuti | 21 Sep 2016

Ccmalta Default

Maltese citizenship alone does not change the tax treatment of an individual or family acquiring citizenship unless they take up residence in Malta.  Malta's connecting factors for tax jurisdiction are residence and domicile (not nationality).  However, citizenship by investment in Malta can result in tax residence for up to two years as explained below.

  Key Points

  • Citizenship alone does not create tax residence or tax consequences.
  • Tax residency arises from a genuine link with Malta established for Malta Citizenship purposes.
  • Tax residency does not necessarily result in taxation. 
  • Tax is only due for resident foreigners on:
    • income / capital gains arising in Malta, and
    • foreign income (not capital / capital gains) only if received in Malta.

Tax Regime for Resident Non-Doms

Therefore the main variable and connecting factor is Residence. By taking up residence in Malta, an individual (whether a citizen or not) enters into a non-dom tax regime akin to the tax regime applicable in the UK, even if without the complicated residence tests and rules applicable in the current British tax system. A Maltese resident who is not Domiciled in Malta is chargeable to tax in Malta only on a source and remittance basis. Therefore he would be chargeable to tax only on income arising in Malta and on foreign source income if and to the he extent that it is remitted /received in Malta. Foreign source capital gains are out of scope of taxation even if remitted to Malta. The tax planning opportunity here is that foreign source income that is kept in bank accounts outside Malta remain out of scope of Malta tax as do foreign capital gains even if remitted to Malta.

Malta Citizenship & Taxation

As a consequence of meeting the residency requirements of Malta's Citizenship by Investment programme, it is prudent to assume that one is exposed to tax resident status.  This should not alarm prospective citizenship applicants.  We have assisted hundreds of citizenship and residency applicants under the Malta (and Cypriot) programs.  Our experience advising on the tax implications of Maltese citizenship and residency ensure you experience only the benefits Malta's res-non-dom tax regime and no avoidable taxation in Malta.  However, pre-immigration tax planning has never been so important if as much as €350,000 or more in avoidable taxes are to be avoided.

Pre-Immigration Tax Planning - a must

Under the Citizenship by Investment Programme, applicants are often bringing into Malta significant sums of money to cover the contribution, the investment in Government bonds as well as property and other investments they may choose to make.  All funds transferred to Malta, even for the payment of taxes, rent, investments, fees or other expenses, maybe be subject to taation in Malta if the funds used are considered taxable income at the source.  Our pre-immigration tax planning service compliments our Malta Citizenship by Investment application handling and ensures that our clients not only enjoy the highest chances of success in applying for citizenship but also in avoiding undue taxes.


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