The tax liability of individuals is dependent on a number of factors which mainly relate to their residence, ordinary residence and domicile.
Individuals who are domiciled and ordinarily resident in Malta are subject to income tax on their world-wide income and capital gains. If a person is either ordinarily resident or domiciled in Malta, but not both, he is subject to tax on income arising in Malta, on income arising abroad but received in Malta and on capital gains arising in Malta. Personal income tax is charged at progressive rates up to a maximum of 35% as illustrated by the following tables:
| Single Rates |
| Taxable Income € |
Rate % |
Deduct € |
| 0 – 8,500 |
0 |
0 |
| 8,501 – 14,500 |
15 |
1,275 |
| 14,501 – 19,500 |
25 |
2,725 |
| 19,501 & over |
35 |
4,675 |
| Married Rates |
| Taxable Income € |
Rate % |
Deduct € |
| 0 – 11,900 |
0 |
0 |
| 11,901 – 21,200 |
15 |
1,785 |
| 21,201 – 28,700 |
25 |
3,905 |
| 28,701 & over |
35 |
6,775 |
Taxation of Non-Resident Individuals
Persons who are neither ordinarily resident nor domiciled in Malta are subject to tax in Malta on income and capital gains arising in Malta only. Local interest and royalty income are exempt from tax, as are capital gains on holdings in collective investment schemes or on securities as long as the underlying asset is not Maltese immovable property.
| Rates for 2008 - 2010 |
| Taxable Income € |
Rate % |
Deduct € |
| 0 – 700 |
0 |
0 |
| 701 – 3,100 |
20 |
140 |
| 3,101-7,800 |
30 |
450 |
| 7,801 & over |
35 |
840 |
Temporary Residents
Persons who are in Malta for some temporary purpose with no intention of establishing their residence therein and who have not resided in Malta for a period greater than six months shall not be taxed in Malta on income arising outside Malta. This means that temporary residents do not pay tax on their foreign income and gains whether remitted to Malta or not. They are liable to tax in Malta only on Malta source income.
Permanent Residents
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The Permanent Residence Scheme has been set up for those individuals seeking to move their tax residence to Malta. Provided that certain conditions are satisfied on an annual basis, an individual may take up residence in Malta under such scheme by obtaining a certificate from the Inland Revenue Department. The holders of this certificate are entitled to various fiscal incentives and advantages including:
- A flat rate of income tax of 15% on income remitted to Malta with a minimum tax liability of €4,193 per year;
- Capital gains remitted to Malta are not subject to any tax;
- No inheritance tax;
- Access to Malta's wide treaty network as well as unilateral relief provisions.