Understanding the meaning of domicile and residence under Maltese law is essential to understanding the tax planning opportunities arising out of the Taxation of Non Domiciliaries Resident in Malta.
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Under Maltese Law, The Domicile of Origin of any individual is that acquired at birth from the father and this may change on the father obtaining a different domicile of choice, showing an intention to reside indefinitely in the new domicile while severing ties with his domicile of origin. On attaining the age of majority (18), one is able to acquire his own domicile of choice in the same way. Malta does not have any deemed domicile rules as have been developed in the United Kingdom.
Resident Non-Dom Status
Persons may move and take up residence in Malta under the most appropriate residence rules applicable to them. In the case of non-EU / EEA nationals, individuals and families may take up residence under the Global Residence Programme. EU nationals may either take up residence in Malta under the Malta Ordinary Residence system or benefit from The Residence Programme Rules.
Maltese tax law deems an individual non-dom resident in Malta on the basis of either spending more than 183 days in Malta or on circumstances demonstrated by the tax payer that support an intention to reside accordingly.
Source & Remittance Basis of Taxation
Non-domiciled residents of Malta are taxable on a remittance basis only on foreign-source income (not foreign-source capital) remitted to Malta and only to the extent remitted. Income and capital gains arising in Malta are always subject to tax in Malta at the applicable personal income tax rates.
Capital gains arising outside Malta fall outside the scope of Maltese tax whether remitted to Malta or otherwise. Capital and savings remitted to Malta also fall outside the scope of Malta tax.
Double taxation relief
Malta enjoys over 60 double tax treaties. persons who take up residence in Malta can receive their pensions in Malta free of tax at source and subject to a mere 15% under the Global Residence Programme or the Retirement Programme.
Overseas capital funds invested locally are of course only taxed on any interest or dividends generated thereon, again at a 15% flat rate. Permanent residents also benefit from double taxation agreements existing between Malta, most European countries, Canada, Australia and the USA, ensuring that tax is never paid twice upon the same income.
Your used household and personal effects, furniture and other domestic articles (excluding firearms and weapons of all kinds) may be imported free of import duty if imported within six months of your arrival in Malta to take up residence. In such cases import licenses are not required.
Other tax considerations
- No inheritance tax
- No estate duty
- No wealth tax
- No municipal taxes
- No rates
- Stamp duty is payable by the acquirer on the transfer of immovable property situated in Malta and transfers of shares in Maltese companies (including transfers on death).
- Exemptions from stamp duty may be available on the transfer of shares in certain Maltese companies, e.g. if the company is listed on the Malta Stock Exchange or if the vast majority (at least 90%) of its business interests are outside Malta.
For more information about the Taxation of Non Domiciliaries Resident in Malta under the various applicable residence programmes, click on the links on the left hand menu of this page.