In this guide, we intend to take you through Malta’s Personal Taxation system, including tax rates for residents and non-residents, and available programmes in the country. Essentially, in Malta, taxation for individuals is based on the individual’s residence, domicile status, and source of income. Specifically, personal income is taxable at graduated progressive rates, ranging from 0% to 35%.
Malta’s Personal Taxation System
The term “resident” refers to an individual residing in Malta except for such temporary absences deemed reasonable and not inconsistent with the claim of such individual to be a resident in Malta.
Individuals who are residents and domiciled in Malta are taxed in Malta based on their worldwide income. This tax is irrespective of whether the income is received in Malta or otherwise. Alternatively, individuals who are residents of Malta but not domiciled there will be taxed in Malta only on their source of income from Malta on the foreign income remitted to Malta.
Additionally, as declared in 2018, an individual who is a term resident or holds a permanent residence certificate or card will no longer be subjected to income tax in Malta under the remittance basis of taxation but will be taxed in Malta based on worldwide income.
Moreover, with effect from 2018, individuals subject to the remittance basis of taxation are subject to a minimum tax of €5,000 per annum subject to certain conditions.
Malta's Personal Income Tax Rates
The tax rates for individuals in Malta vary based on their residency status, with different rates applied to residents and non-residents.
Know more about Tax for Individuals.
Resident Tax Rates in Malta
Malta implements three different kinds of tax rates for individual residents based on their marital status, listed below:
- Firstly, taxation rates for Singles: Applies to unmarried individuals.
- Additionally, taxation rates for married couples: Applies to married couples who opt for a joint tax computation.
- Furthermore, taxation rates for couples with children: Applies to individuals or couples earning not more than €3,400 per annum who have a child below the age of 18 years, or 23 years if the child is attending tertiary education.
Below is a breakdown of tax rates for residents in Malta from The Office of the Commissioner for Revenue in Malta.
Tax Rates for Residents in Malta |
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|---|---|---|---|
|
Chargeable Income (€) |
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| From | To | Rate | Subtract (€) |
| Single Rates | |||
| 0 | 9,100 | 0% | 0 |
| 9,101 | 14,500 | 15% | 1,365 |
| 14,501 | 19,500 | 25% | 2,815 |
| 19,501 | 60,000 | 25% | 2,725 |
| 60,001 | and over | 35% | 8,725 |
| Married Rates | |||
| 0 | 12,700 | 0% | 0 |
| 12,701 | 21,200 | 15% | 1,905 |
| 21,201 | 28,700 | 25% | 4,025 |
| 28,701 | 60,000 | 25% | 3,905 |
| 60,001 | and over | 35% | 9,905 |
| Parent Rates | |||
| 0 | 10,500 | 0% | 0 |
| 10,501 | 15,800 | 15% | 1,575 |
| 15,801 | 21,200 | 25% | 3,155 |
| 21,201 | 60,000 | 25% | 3,050 |
| 60,001 | and over | 35% | 9,050 |
Non-Residents Tax Rates in Malta
Taxpayers who are not residents of Malta are subject to the following tax rates (for income tax purposes) on their income arising in Malta:
Below is a breakdown of tax rates for non-residents in Malta from The Office of the Commissioner for Revenue in Malta.
Tax Rates for Non-Residents in Malta |
|||
|---|---|---|---|
| Chargeable Income (€) | |||
| From | To | Rate | Subtract (€) |
| 0 | 700 | 0% | 0 |
| 701 | 3,100 | 20% | 140 |
| 3,101 | 7,800 | 30% | 450 |
| 7,801 | and over | 35% | 840 |
Payment of Tax in Malta
As per Malta's personal tax system, the payment of (Personal) Tax is carried out in three ways:
- The Provisional Tax system: This includes individuals engaged in a trade, business, profession, or vocation. These individuals are liable for the annual payment of taxes under the Provisional Tax (PT) system. PT is paid in three instalments during the year, and the amount of PT due is calculated on the tax due by the individual in the benchmark year.
- The Final Settlement System (FSS): Individuals receiving a salary or wage are liable for paying taxes under The Final Settlement System (FSS). The payor of the income deducts tax payments from the monthly wage of the employee.
- The Self-Assessment System: Applicable for an individual in Malta who has not paid under the PT or FSS. The tax will be collected by 30th June of the year following which the income has been received.
Finally, Malta does not levy inheritance tax. However, the causa mortis transfer of shares in Maltese companies and immovable property situated in Malta are subject to stamp duty.
In addition, the causa mortis transfer of immovable property in Malta is subject to stamp duty that needs to be paid by the person transferring at the rate of 5% on the market value of the property at the time of transfer.
Moreover, the causa mortis transfer of shares in Maltese companies is subject to stamp duty at the rate of 2% of the market value of the shares transferred or at the rate of 5% if the company owns immovable property situated in Malta. Certain transfers of shares in Maltese companies may be exempt from stamp duty.
Social Security Contributions in Malta
Individuals who are over the age of 16 and who have not yet attained the retirement age of 65 years, and who are in insurable employment are liable to pay Social Security Contributions.
Social Security Contributions are paid in weekly rates, and each year of gainful occupation will include 52 or 53 social security contributions (depending on the annual number of Mondays) on the payee’s contribution record.
Read more about the Social Security Contributions Rates.
Maltese Residence Schemes
Malta Permanent Residence Programme (MPRP)
Malta offers attractive residence schemes with associated tax advantages (no taxation on worldwide income). Taxes will be based only on Maltese sourced income, foreign income, and gains received in Malta.
The Malta Permanent Residence Programme (MPRP) is designed to attract non-EU/EEA/Swiss nationals. You can benefit from a flat rate of taxation on foreign income remitted to Malta and travel visa-free to 26 Schengen countries.
Get a deeper understanding of the MPRP through our guide.
Foreigners may take up residence in Malta and be subject to the normal income tax rates with no minimum tax or remittance requirements.
No net wealth or real estate taxes are levied in Malta. However, the sale of immovable property and other listed capital assets are subjected to capital gains tax. Furthermore, the sale of immovable property which served as one’s main residence is not subject to tax provided that certain criteria are met.
Moreover, there is also the Malta Global Residence Programme and the Malta Retirement Programme, which have special tax statuses for applicants. You may also consider the Malta Highly Qualified Persons Rules, which is designed for highly qualified individuals occupying an eligible office with the financial services, gaming and aviation industry and assisted reproduction technology to Malta.
The Malta Global Residence Programme
The Malta Retirement Programme
Malta Highly Qualified Persons Rules
Designed to attract highly qualified individuals occupying an eligible office with the financial services, gaming and aviation industry and assisted reproduction technology to Malta. Beneficiaries of this program benefit from a flat rate of taxation at 15% on employment income derived from an eligible office up to a maximum income of €5,000,000.
