Income Tax in Malta

In Malta the taxation of an individual's income is progressive; i.e. the higher an individual's income, the higher the tax paid.

Malta Tax Rates

Below are the tax rates in Malta for 2018, based on the status of the individual: Single; Married; Parent.

TAX RATES FOR BASIS YEAR 2018

           Chargeable Income (€)

             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

The rate of corporate tax in Malta for 2018 is fixed at 35% with full imputation system applying for dividends. There are reduced rates for certain companies.

Malta Income Tax for an Individual

Income tax Malta varies according to one’s residency status in Malta.

  • An individual who is a Maltese Resident pays tax on his/her income as a wage earner or as a self-employed person. 
  • A person who meets the criteria of a ‘permanent resident’ (usually, a stay of more than 183 days a year) will be taxed on his/her income in Malta and overseas.
  • A foreign resident who is employed in Malta pays tax only on the income s/he earns in Malta.

An employer is obligated to deduct at source, each month, the amount of tax payable on a wage.

Certain payments are deductible from the taxable income of an individual that are allowable for tax purposes. You can read more about fringe benefits here.

Separate calculations - A couple, each with separate sources of income, may report separately on their income; however, one of the couple must be nominated as the ‘representative partner’ for the purposes of the tax authorities.

Passive income, such as rental of an asset, is attributed to the person (within the couple) having the higher income.

Tax Reporting Dates for an Individual in Malta

  • The tax year in Malta is the calendar year ending on 31st December.
  • The date for filing an annual return in Malta is 30th June.

During the year, a self-employed person must make 3 equal advance payments on April 30, August 31 and December 31. The advance payment is based on the taxable income for the previous year.

Should there still be tax payable, it should be paid by the August 31 following the end of the tax year.

An employed person whose employer has deducted monthly tax from his salary is not bound to file an annual return. Nevertheless, an employed person must submit a declaration by June 15.

A similar declaration must be filed by an individual in respect of his/her income from a pension, dividend from a local corporation, and income from an investment in respect of which tax at 15% was deducted at source.

Reporting and Payment Dates for a Limited Company in Malta

The date for submitting a report is June 30. In practice, a report may be submitted up until September 30.

Advance payments for a company must make 3 equal advance payments on April 30, August 31 and December 31. The advance payment is based on the taxable income for the previous year.

Annual tax differentials must be paid by September 30.

Malta Corporate Tax

Malta Corporate tax rate for 2018 is 35%.

A company is resident if either:

  • incorporated in Malta; or,
  • not incorporated in Malta but has its business management in Malta

There is no obligation to deduct tax at source from a dividend paid to foreign residents. There is zero withholding tax on interest and royalties paid to foreign residents.

Passive or capital income from a ‘participation holding’ have participation exemption.

Participation Holding is defined in general as holding of 10% or more in a non-resident entity, subject to some alternative tests.

Malta Deduction of Tax at Source (non-residents)

Malta tax rates for deduction at source:

  • Dividends - 0%
  • Interest - 0%
  • Royalties - 0%

Expatriate Taxation

To attract highly qualified personnel from abroad, Malta has introduced an incentive scheme targeting foreign executives. Professionals in the financial services, gaming and aviation sectors can benefit from a flat personal income tax rate of 15% on income up to €5 million. Any income over that figure is tax-free. To qualify for this tax incentive, the employee must earn a minimum of €85,016 per year among other criteria. EU nationals can benefit from the reduced tax rate for an unlimited period, EEA and Swiss nationals for a period of ten years and third-country nationals for four consecutive years.

Malta is also an attractive place for high-net-worth individuals and their families to relocate to. While Malta offers a unique lifestyle of unsurpassed quality that combines comfort with luxury, the modern and the traditional, and work with pleasure, the country has introduced a programme which offers foreigners favourable conditions if they purchase or rent property of a certain value in Malta or Gozo. The Global Residence Programme is designed to attract individuals who are not nationals of the EU, the EEA or Switzerland and allows them to benefit from a 15% flat tax rate and a residence permit. A similar programme for EU nationals, the Residence Programme, was introduced in the summer of 2014.

For tax guidelines see the Inland Revenue Department website

Download the Income Tax Act of Malta here

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