Tax Incentives Malta

Tax Incentives Malta & High Net Worth Individuals Rule. The following is a list of incentives and advantages applicable to beneficiaries recognized as High Net Worth Individuals:

• A Low flat rate of income tax of 15% with a minimum tax liability of € 20,000 after double taxation relief per annum, plus an additional €2,500 per dependent. The tax is calculated on foreign income (excluding capital gains) remitted to Malta;
• High Net Worth Individuals are not subject to tax on worldwide income. Foreign source income is taxed in Malta to the extent that it is received in or remitted to Malta;
• There is no real estate tax in Malta. Tax on capital gains arising from the sale of real estate in Malta does exist but residents are exempt if they have used the property as their main residence for three consecutive years and the property is disposed of not later than one year of vacating it.
• Malta’s tax legislation provides for relief from double taxation, whether through negotiated double tax agreements with a substantial number of countries worldwide, or through unilateral provisions. Certain foreign income remitted to Malta qualifies for a reduced withholding rate of foreign tax (this applies typically to individuals, interest and royalties), or is exempt from foreign tax (this applies typically to private pensions and to certain capital gains). The provisions of each particular treaty entered into by Malta must, however, be consulted to determine the treatment of each item of income in each particular case.

Double taxation:

Albania	Finland	Lebanon	San Marino
Australia	France	Libya	Singapore
Austria	Georgia	Lithuania	Slovakia
Barbados	Greece	Luxembourg	Slovenia
Belgium	Germany	Morocco	South Africa
Bulgaria	Hungary	Montenegro	Sweden
Canada	Iceland	Malaysia	Spain
China	India	Netherlands	Switzerland
Croatia	Ireland	Norway	Syria
Cyprus	Isle of Man	Pakistan	Tunisia
Czech Rep.	Italy	Poland	U.A.E.
Denmark	Rep. of Korea	Portugal	U.K.
Egypt	Rep. Kuwait	Qatar	U.S.A.
Estonia	Latvia	Romania

Taxation

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. As already noted, however, foreigners residing in Malta are not taxed on their worldwide income, but only on Maltese source income and capital gains and on foreign source income remitted to Malta. Foreign source capital gains are not taxed even if remitted to Malta. The applicable income tax rates are, however, the normal rates of income tax applicable to residents, which are as follows:

“Married” Rates

First	€ 11,900	Nil
Next	€ 9,299	15%
Next	€ 7,499	25%
Remainder	over € 28,701	35%

“Single” Rates

First	€ 8,500	Nil
Next	€ 5,999	15%
Next	€ 4,999	25%
Remainder	over € 19,501	35%

 

Inheritance Tax

There is no inheritance tax in Malta. However, in the event of death, the beneficiary is liable to 5% transfer tax on the value of the immovable property, as at time of death. If the property is jointly owned and one of the spouses passes away, the 5% is levied on half the value of the property.

This tax is not payable upon the transfer of the residential home to the surviving spouse, provided that the surviving spouse does not sell the home during his/her lifetime.