大咖福利影院

Menu
大咖福利影院
Search
Magazine
Search

Taxation in Malta

Malta110
#1
Can anyone shed light on the Maltese Tax regime for someone moving from the UK to Malta to live?
Is it better to be tax domicile in Malta?
Where do you get advice & help? Thanks
See also
Armand
#2
Hi and welcome on 大咖福利影院 malta110 :)

When are you intending to move? I hope you will get responses and advices from other members on the forum ;)

Good luck
Armand
S
#3
Hi! I used Johh Huber as he was recommended聽 by many of the people I knew had moved to Malta.His advice was smooth detailed and to the point so why hassle and worry that you're on the wrong track?聽 I googled him to find his聽 contact details.
Myrkur
#4
wow so much promotion for John Huber hmmm..;)
G
#5
I can also recommend John
Toon
#6
i would be very careful ...the聽 tax rates vary depending on your income...

salary upto 8500 tax free
salary 8501 to 14500 15% (based on chargeable income x rate less 1275)
salary 14501 to 19500 25% (based on chargeable income x rate less 2725)
salary over 19501 35% (based on chargeable income x rate less 4675

its not like the Uk where its a sliding scale of tax payable in bands....e.g first 7500 0%, 10% on next 2000, then 20% then whatever and so on.
scubaboy
#7
Hi Toonarmy,

The rates you have given are Single person rates i understand that if you are married the rates change..

I may be wrong though

Julian
G
#8

toonarmy9752 wrote:

its not like the Uk where its a sliding scale of tax payable in bands....e.g first 7500 0%, 10% on next 2000, then 20% then whatever and so on.


it is like the UK聽 - it is a sliding scale :-)

Toon
#9
ok bad choice of words - they do the calculations in a completely different way....i.e they tax your whole salary at the appropriate rate depending what band your salary falls in - then they make a deduction.... maybe it works out the same i dont know....but to the unwary it looks very very strange and not that straightforward.....i have spent the last few days digesting the booklet that came with my sons self assessment. I think i now understand how it works.

plus at the end of the year you are absolutely required to compete a self assessment irrespective of any tax you have already had deducted by your employer and you then settle any shortfalls at the end of June of the following year and wait for six months to have any over paid tax refunded to you plus only getting 0.0075% interest (starting at then end of the first six months) paid to you when they're late.
Toon
#10
yes the rates (by example are single ones) but they do change to 11900 for a married couple聽 - but you can choose to be taxed singly with 8500 allowances each if its advantageous to you (IRD approved)

and then it gets even more complicated when you may have uk income from pensions and savings income as well as Maltese income....as you then have to choose between being temporary resident or permanent resident then it all changes again - further complicated by the double taxation treaty that exists between certain countries - including the UK and Malta...

Q. open to all....how does the IRD make the calculation into euros for uk sourced income that is chosen to be taxed at malti rates.

is it a set rate per year, is it based on when you exchange the currency, do they take an average for the tax year or do they take the rate at the time of the return.......i personally keep a record of all me exchanges...just in case...belt and braces and all that.

If its really complicated it would be best to get a local tax professional to help (I AM TOLD ITS ONLY ABOUT 50 EUROS FOR A CONSULTATION)聽 so its probably worth it to get the first one correct
G
#11
you don't get taxed on bringing 拢 into Malta, but on the actual 聙 its converted into (ps if you bring in 拢 in year 1, and convert it in year 2 its taxed in year 2)

if you earn 拢 in Malta (eg 拢 bank account) its converted at av fx rate for the year, a rate set by IR

I've been here 8 years and still use an accountant (John Huber) as I think its worth the fees for peace of mind, plus his fees are often covered by making sure I claim all allowances and declare income correctly.
1 member reacted to this post
Toon
#12
yes i understand this - but what about those who choose to pay all their tax here (under protection of the double taxation treaty) even on uk sourced income pensions, savings interest etc - and the pension and interest is paid monthly and converted monthly at the going rate at that time
G
#13
Makes no difference  - its still "you don't get taxed on bringing 拢 into Malta, but on the actual 聙 its converted into" - if its converted into 聙 before reaching Malta, then you are taxed on the actual 聙 amount.

ps double taxation treaty doesn't mean you don't pay tax in the UK, but that the UK tax is taken into account before you pay tax in Malta.
Toon
#14
yes i understand that too - you pay it in uk and claim it as a deduction against tax in the tax return so you dont pay tax on the same amounnt twice - hence the "double taxation treaty" and can have it taxed at local rates.....but it still raises the question of what exchange rate is used for all the other regular income that IS changed each month of the year....

of course it makes a difference in terms of the emolument value to be taxed. if you convert to euro at a high rate or a low rate...

thus a record of the exchange values and rates etc needs to be kept on a monthly basis to record this as the聽 IRD wouldnt necessarily know what that was or when you exchanged - as some may choose to have it paid to uk accounts and remain there not only earning聽 more interest tbut also remaining there until the exchange rate is acceptable - double edge sword really - cant win....
G
#15
as I said "you don't get taxed on bringing 拢 into Malta, but on the actual 聙 its converted into" ie the rate you convert it at
Toon
#16
records must be kept then
G
#17
yep, of the 聙 amounts of income brought into Malta or earned in Malta, plus 拢 (or other currencies)earned in Malta.
Toon
#18
how do they check these values or do they just take your word for it then - or do they ask for proof
G
#19
As in the UK, they take your word for it unless they audit your tax return
Toon
#20
So in your opinion is it advantageous to be taxed here while claiming the benefits of the DT treaty.聽 it certainly would seem to be the case.
G
#21
It is for me, and for many others, but not all - it depends on your individual circumstances. DT treaty is of no use to me - what is valuable for me is the fact only income brought into Malta is taxed
Malta110
#22
Thanks to everyone for their comments.
Now awaiting the publication of the revised Permenent Residence scheme which is taking a while!
scubaboy
#23
Also found out that if your basic wage is more than 353.85 euro a week then you only pay a fixed Social security of 35.39 euro a week not the 10%....
scubaboy
#24
George,

You say its a sliding scale does that mean you work out your salary income (net) based on first 8500 free next tax band such and such etc...??

Thanks
G
#25
scubaboy - yes

Malta110 "Now awaiting the publication of the revised Permenent Residence scheme " - are you sure you want to use PR ? For the vast majority of EU citizens ordinary residence is much better
scubaboy
#26
thats made me a little better off then :) cheers again george
rooikat
#27
Could someone please explain a little more simply what zijanin has just said. It sounds like it must be good advice but the terminology has left me gasping;)
petr1029
#28
Hi Zijanin, thank you for your contribution to taxation questions.
I agree with you 100%, saving few euro and not receiving conclusive, insured advice is counter-productive for anyone who moves to Malta for tax optimisation purposes.

I am in process of researching non-dom ordinary residence rules for online income, you can see my quest for information here: /forum/viewtopic.php?id=110421

I studied Maltese income tax law and could not find definition of "foreign source" income as such, which leaves some scenarios in grey area and subject to interpretation. Note that legal systems of UK and Ireland already addressed these areas (of course in such way that it favours the taxation office, not the taxpayer). Hopefully Malta is more sensitive to the fact that many people come to their little island to optimise tax.

I will also contact the company you mentioned, perhaps they know Inland Revenue of Malta's official stand on "daily Internet based work" and maybe there is a legal precedent already.

Regards,

Petr
brayster99
#29
so afaik

If you are tax resident non dom from the UK living in Malta and you do not part of the special schemes then;

- you are taxed on income from Maltese sources, local rates apply
- you not taxed on your global income
- you are taxed on a remittance basis (bringing your money in) on income
- you are not taxed on remittance on capital

you may have tax obligations on your UK arising income. And the UK is now dreaming up new legislation with respect to you breaking uk tax residency.
G
#30
- you are taxed on income from Maltese sources, local rates apply
- you not taxed on your global income
- you are taxed on a remittance basis (bringing your money in) on income
- you are not taxed on remittance on capital or capital gains
G
#31
The fun part is "when does income becomes capital" - there is no legal definition
brayster99
#32
yes, i think intentionally so that the taxman retains the right to hobble you at anytime in the future. I am googling around a bit and there seems to be no single answer.

What rule does everyone else follow on this, i.e. what is the excepted norm. By tax advisor said three聽 years in the bank would defintely transform income to capital but there seems to be some chatter around holding the income for 366 days.

If I bought stocks and then sold them the next day, they'd be capital instantly right? :-)
G
#33

brayster99 wrote:

If I bought stocks and then sold them the next day, they'd be capital instantly right? :-)


depends on your intention. If your reason for selling was merely to try and convert into capital, then no.

G
#34
"What rule does everyone else follow on this, i.e. what is the excepted norm. By tax advisor said three聽 years in the bank would defintely transform income to capital but there seems to be some chatter around holding the income for 366 days. " - the longer the better ! 1 year used to be considered sufficient, but the taxman seems to be getting tougher on it
brayster99
#35
how does one justify intention? that pesky taxman and his clairvoyancey..
G
#36
what is important is separation of income and capital - eg on a bank account have the interest paid into a different account so its segregated
G
#37

brayster99 wrote:

how does one justify intention? that pesky taxman and his clairvoyancey..


well if you bought something on Monday and sold it on Tuesday and had no justification for doing so, then the suggestion is that it was done for tax evasion purposes.

brayster99
#38
its completely bonkers, i mean what if i held the stock for 1 week, 1 month, 3, 6, 12 months? what if it were high risk or low risk, would that make a difference? At the end of the day the tax makes an entirely subjective view (which could be challenged) about whether or not he deems it income or not.

mind you, isn't all tax like that? Didn't Warren Buffet famously say "tax is optional"?

My understanding is that this fact and the legal barrier that they offer is the reason why the "big four" exist.
G
#39

brayster99 wrote:

its completely bonkers, i mean what if i held the stock for 1 week, 1 month, 3, 6, 12 months? what if it were high risk or low risk, would that make a difference?


yes, the longer its held, the more volatile the asset price is, the more likely it will be deemed capital.

Lusco
#40

brayster99 wrote:

My understanding is that this fact and the legal barrier that they offer is the reason why the "big four" exist.


I think the big four exists because of the credibility they are supposed to have as an independent 3rd party. I guess their incomes come more from audit services rather than taxes services. Personal tax planning is relatively easy, corporate tax planning is madness.聽
brayster I read about the company you own with your partner in several countries and if I am not wrong your companies are supposed to must follow transfer pricing rules (or at least the arm's length principle) on the transactions between your different companies in different jurisdictions. Transfer pricing is one of those things that the big four usually do, they have specific departments of transfer pricing. Transfer prices are subjective so I think that when is done by a 3rd party with credibility it is less likely that the taxman will discuss the transfer prices. That is just one example but there are lots of reasons for some companies to use big four firms.

Make your relocation easier with the Malta expat guide

Forum topics on tax in Malta

US Expat Trying To Navigate Res-Non-Dom Tax Scheme
Do pensioners from UK have to pay Tax on their Pension in Malta ?
Rental income outside of Malta
Leaving Malta, I'm Portuguese, what do I need to do?
Tax calculation for self-employed
Question Regarding non domiciled but resident tax wise
Tax refund when leaving Malta
Malta Tax
Tax on self employed income
Getting a Tax Number
tax advice Malta - professional gambler
Malta&Tax And Salary Calculator
Tax paying and calculating
Tax rate
Tax office
Ordinary Residence - ramifications from new HNWI scheme
Income Tax Return
Where do you go to register to pay tax
Other discussions about tax in Malta

大咖福利影院 for your expat journey

Choose the best health insurance
Protect your health and get easy access to treatment for expats in Malta.
Plan your international move
Facilitate your move to Malta by getting a quote from our top rated movers.
Open a bank account that suits you
Discover the best international banks to manage your money securely.
Plan your retirement
Plan your retirement income with the advice of an expert.