Malta Res Non-Dom Taxation

Taxation of Resident Non-Domiciliaries in Malta

Dr. Jean-Philippe Chetcuti co-authored with Magdalena Velkovska | 15 Aug 2023

Non Dom Taxation Living Expenses

The remittance basis of taxation is the key feature of Malta Res Non-Dom Taxation and is outlined below.

Malta Res Non-Dom Status

'Domicile' is not to be confused with 'residence'.  Under the Anglo-Saxon origins of the Maltese law significance of domicile, the domicile of origin is automatically obtained at birth from the father. On completing the 18th birthday, an individual may acquire a domicile of choice, that is to say a domicile that is not dependent any longer on that of his father.

Malta Tax Resident Status

Maltese residency may be acquired under different immigration routes as more appropriately apply to the applicant's circumstances.  EU / EEA nationals are entitled to residency under two main routes: The Residence Programme and Ordinary Residence.   Non-EU/EEA nationals are able to acquire residency under the Malta Global Residence programme.  Malta has fully implemented the Schengen Area Treaty and therefore a Maltese residence card entitles the holder to travel freely within the Schengen area for up to 90 days in any 6 month period.

Residence for tax purposes is established either on the basis of a 183 days presence within any fiscal year, or of circumstances indicating an intention to reside ordinarily in Malta.

Malta Res Non-Dom Taxation

As a Malta resident non-dom, an individual is subject to tax on:

  • local source income, that is to say, income arising in Malta in any form.
  • local source capital gains, that is to say, gains arising from the transfer of capital assets.
  • foreign source income only to the extent remitted to Malta.

Gains on the transfer of capital items abroad do not fall within the scope of Maltese tax even if remitted partially or fully to Malta.

Origin's of Malta's Res Non-Dom Tax System

Since the 1940s, when Malta received its own Income Tax Act under British colonial rule, the personal tax system of Malta imposes tax on non-domiciled individuals being tax resident in Malta, res non-doms, only on Maltese source income as well as foreign income that is remitted to Malta. The Maltese Res Non-Dom tax system allows non-domiciled individuals to pay tax only on that part of their overseas income they remit to Malta. Different from its UK equivalent, Malta’s remittance basis regime applies only a nominal minimum annual charge of €5,000 on persons claiming Maltese res non dom tax status, and does not have the complex statutory residence rules and deemed domicile rules that the UK has since introduced into tax systems.  The absence of any deemed domicile rules in Malta’s res non dom tax system means that no limit is imposed on the length of time during which an individual may enjoy this favourable tax system. Nor does the Maltese tax system impose a pre-requisite that the individual has not been a tax resident of Malta for any period prior to taking up tax residency to enjoy Malta’s remittance basis of taxation. 

Malta Res Non-Dom Personal Taxation Advice

Our Tax Advisory practice is experienced in advising on Malta Res Non-Dom Taxation matters whether for private clients as well as companies registered outside Malta but resident for tax purposes in Malta, and therefore subject to the same tax system described above.  For more information on Malta Res Non-Dom Taxation, please do not hesitate to contact us.

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