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.
Table of Contents
Non-Domiciled Status
In accordance with Maltese Laws, every individual acquires domicile of origin at birth, which follows the domicile of paternal side. On attaining the age of majority (18), one is able to acquire domicile of choice, showing an intention to reside indefinitely in the new country of domicile while severing ties with his domicile of origin. Malta does not have any deemed domicile rules as have been developed in the United Kingdom.
Resident Non-Dom Status
Residence permits are issued under immigration law and are a pre-requisite for entering and staying in Malta. Holding a residence permit does not, of its own right, result in the establishment of tax residence status.
It is therefore crucial that individuals who wish to estalibsh Res, Non-Dom status in Malta consider applying for a Residency card whlst simoultaneously following the Maltese tax residency crtieria, to ensure the Res, Non-Dom status is established and can be appropriately evidenced.
Individuals intending to relocate and take up residence in Malta can do this 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 taxpayer that support an intention to reside accordingly.
Source & Remittance Basis of Taxation
Non-domiciled residents of Malta are taxed on remittance basis, only on the portion of their foreign income remitted to Malta. The non-remitted income derived outside of Malta is not subject to income tax in Malta. Any locally derived income and capital gains are subject to income tax in Malta on source basis, at the applicable resident personal income tax rates.
– See Taxation of Pensions for Non-Doms 
Capital gains
Capital gains arising outside Malta fall outside the scope of Maltese tax whether remitted to Malta or otherwise. Capital and pre-immigration funds remitted to Malta also fall outside the scope of Malta income tax. Hence the importance of timely planning your personal banking affairs, ensuring non-contamination of the accounts containing different profits in nature.
Double taxation relief
Malta enjoys over 80 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 in the hands of the same taxpayer.
– See Malta’s Double Tax Treaty Network
Your household effects and personal belongings, furniture and other domestic articles 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.
Read more on importation of motor vehicles.
Other tax considerations
- No inheritance tax
- No estate duty
- No wealth tax
- No gift 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.
