Key Facts:

Climate – Mediterranean; mild, rainy winters; hot, dry summers

Population – 514,564

GDP (Per Capita) (2019) – $32,021

Official language – Maltese, English

Major Religions – Christianity (95.2%), Islam (0.3%)

Ethnic Groups – Maltese (79%), Non-Maltese (21%)

Government – parliamentary republic

Currency – Euro (EUR)

Taxes – Persons ordinarily resident and domiciled in Malta are subject to income tax in Malta on their worldwide income and chargeable gains. Persons who are ordinarily resident and not domiciled in Malta are taxable in Malta on a source and remittance basis, that is, on income and chargeable gains arising in Malta and on income arising outside Malta that is received in Malta (i.e., such persons are not taxable in Malta on income arising outside Malta and not received in Malta and on capital gains arising outside Malta, regardless of whether they are received in Malta). It should be noted that persons who (i) are resident or domiciled in Malta and who are married to an individual who is ordinarily resident and domiciled in Malta, or (ii) are long-term residents that hold a permanent residence certificate or a permanent residence card are subject to tax in Malta on a worldwide basis (and not on a source and remittance basis).

Taxable income includes gains or profits derived, inter alia, from a trade or business; profession or vocation; employment or office; dividends, interest, or discounts; pensions, annuities, or annual payments; rents, royalties, premiums, and any other profits arising from property; and certain chargeable capital gains.

Rates are progressive, ranging from 0% to 35%. The amount of taxable income is multiplied by the applicable rate, and a deduction (depending on the rate) is subtracted from the result. A flat tax rate of 15% applies to emoluments derived by highly qualified persons employed in a qualifying industry (such as financial services, gaming, or aviation) under a qualifying contract of employment. A 15% withholding tax applies to certain investment income. Additionally, subject to conditions, a flat tax rate of 15% applies to foreign-source income remitted to Malta by persons benefiting under specific residence schemes. In certain circumstances, a person ordinarily resident but not domiciled in Malta is liable to a minimum tax of EUR 5,000 per annum.

Gains on the transfer of capital assets are aggregated with a person’s other income, and the total of income and capital gains is charged to income tax. Capital gains arise, inter alia, upon a transfer of: (i) immovable property; (ii) securities, business goodwill, business permits, copyrights, patents, trademarks, trade names, and any other intellectual property; (iii) interests in a partnership; and (iv) beneficial interests in trusts that hold property referred to above. However, when a person transfers immovable property situated in Malta, final tax is payable at a rate of 8% on the transfer value; other rates (mainly 2%, 5%, 7%, 10%, and 12%) may apply in specific cases. Nonresidents are not subject to tax on gains or profits realized on a disposal of units in a CIS, units relating to long-term insurance policies, interests in a partnership, and shares or securities in a company, unless the partnership’s or company’s assets consist wholly or principally of immovable property situated in Malta and/or the nonresident person does not act on behalf of an individual or individuals who are ordinarily resident and domiciled in Malta.

Residency by Investment:

The Malta Residence and Visa Program (MRVP) offers non-Maltese persons the possibility of acquiring an EU residence card that offers visa-free travel within Europe’s Schengen Area. The minimum requirements are:

An investment in government bonds of EUR 250,000 to be retained for a minimum period of five years
A non-refundable government contribution of EUR 30,000 (EUR 5,500 of which is an advance government administrative fee)
A property purchase of EUR 320,000 (EUR 270,000 in South Malta or Gozo), or a property lease of EUR 12,000 per annum (EUR 10,000 in South Malta or Gozo)