Updated: October 07, 2021 | 4 minute read

    Introduction

    Malta offers a favourable tax regime for foreigners relocating to the country. With no inheritance, wealth, or annual property taxes, expats often venture to work in the country or even retire.  

    With the benefits of the taxpayers in mind, Malta has created an incentive tax system aimed to attract expats and draw them to the financial sector, iGaming, aviation, and shipping. 

    Tax Rates for Non-Resident Expats 

    For expatriates working in Malta, personal income tax rates are 15% on income up to €5 million. Any income sourced from outside Malta (including capital gains) is completely tax-free. The Maltese government has created an incentive of 0% tax deducted at source on dividends, interest, and royalties received for non-residents in Malta.  

    However, to qualify under this, an individual must be making €85,016 per year and must not be a resident or domiciled in Malta. Generally, if you stay in Malta for less than six months, you will be considered a non-resident.  

    Tax Rates for Non-Resident Expats 

    Tax Rates for Resident Expats 

    If you are both a resident and domicile of Malta, your worldwide income and capital gains will be taxed. You will be taxed on the income and capital gains acquired in Malta, as well as the foreign income received while in Malta. 

    The foreign capital gains received by these individuals will not be subject to income tax in Malta, even if profits are received on the island. EU nationals may benefit from a reduced tax system for an unlimited period and four consecutive years for Malta and third-country nationals. 

    Tax Rates for Resident Expats 

    Tax for Expat Retirees   

    For expats who want to retire in Malta, there are different requirements/tax rates. 

    If you are an EU national not domiciled in Malta, you can retire in Malta and benefit from lenient tax rates. Pension income from private pension schemes is exempted from taxes. Any capital gains received will be remitted free from tax. It means that if you retire intending to leave off capital, you can live completely tax-free. Malta has favourable tax rates for dividend and interest income earned abroad and remitted to Malta. 

    Tax for Expat Retirees   

    By utilising a QROPS pension transfer, you will claim your pension tax-free as income is only taxed if it is remitted into Malta. These tax bonuses are one of the main reasons workers, businesses, and retirees are choosing Malta. 

    At Endevio, we understand how taxation can be complicated, especially for expats in Malta. Our expertise in tax advisory and compliance has helped expats and other individuals take advantage of their circumstances to work with the Maltese tax system. For any tax-related queries, get in touch with us.