Malta Res Non Dom Taxation

TAX SYSTEM: EU Approved EU: Member of the EU & Eurozone DOUBLE TAX TREATIES: Broad network of over 70 signed DTTs SCHENGEN STATUS: Full Member TOTAL AREA: 442,6 km2

SPECIFIC TAX RATES: For beneficiaries of TRP or GRP programmes

REMITTANCE AND SOURCE BASIS OF TAXATION: For resident, non-domiciled individuals

• EU Jurisdiction
• Relief from double taxation
• Remittance basis of taxation for resident non-dom individuals
• Foreign source capital gains remitted, free of tax

The general rules regarding taxation of individuals in Malta are laid down in the Income Tax Act (the “ITA”). Malta also has a broad network of over 70 double taxation treaties.

In terms of the provisions of the ITA, the connecting factors that give rise to taxation of an individual in Malta are: tax residence and domicile. Individuals who are neither resident nor domiciled in Malta are taxed only on a source basis.

Individuals who are both resident and domiciled in Malta are taxed in Malta on their worldwide income and chargeable gains. This means that income and gains are taxable in Malta regardless of whether they arise and whether they are brought to Malta or not.

On the other hand, individuals who are resident but not domiciled in Malta are taxable in Malta on a remittance and source basis of taxation. This means that they are taxable in Malta only on:

• local source income
• local source chargeable capital gains and
• foreign source income which is remitted to Malta.

An individual who is resident but not domiciled in Malta will therefore not be subject to tax in Malta on any foreign source capital gains (even if these are remitted to Malta).

Individuals who are neither tax resident nor domiciled in Malta are only subject to tax in Malta on income or capital gains arising in Malta.