Expat Tax Rates in Malta

For expatriates working in Malta, personal income tax rates are 15% on income up to €5 million. Conversely, any income sourced from outside Malta (including capital gains) is completely tax-free. The Maltese government has created an incentive of 0% tax deducted at source on dividends, interest, and royalties received for non-residents in Malta.  

However, to qualify under this, an individual must be making €85,016 per year and must not be a resident or domiciled in Malta. Generally, if you stay in Malta for less than six months, you will be considered a non-resident.  

If you are both a resident and domicile of Malta, your worldwide income and capital gains will be taxed. Essentially, you will be taxed on the income and capital gains acquired in Malta, as well as the foreign income received while in Malta. 

Additionally, the foreign capital gains received by these individuals will not be subject to income tax in Malta, even if profits are received on the island. Notably, EU nationals may benefit from a reduced tax system for an unlimited period and four consecutive years for Malta and third-country nationals. 

For expats who want to retire in Malta, there are different requirements/tax rates. 

If you are an EU national not domiciled in Malta, you can retire in Malta and benefit from lenient tax rates. Pension income from private pension schemes is exempted from taxes. Any capital gains received will be remitted free from tax. It means that if you retire intending to leave off capital, you can live completely tax-free. Malta has favourable tax rates for dividend and interest income earned abroad and remitted to Malta. 

By utilising a QROPS pension transfer, you will claim your pension tax-free as income is only taxed if it is remitted into Malta. These tax bonuses are one of the main reasons workers, businesses, and retirees are choosing Malta.