Are you renting out a property in Malta? If so, then you may have the option of taxing the rental income at a flat rate of 15%. This optional 15% flat rate of tax rate on rental income is available for residential and commercial rental income derived from immovable property situated in Malta.

How do I work out the 15% Flat Rate Rental Income Tax?

The 15% flat rate of taxation on rental income is deemed to be a final tax and is calculated on the gross rental income received in Malta in the calendar year (tax basis year).

  • No deductions for expenses are permitted against the rental income received in Malta if using the 15% flat rate of taxation on rental income.
  • No refunds can be claimed against the rental income received if using the 15% flat rate of taxation on rental income in Malta.

Do I have to be a resident of Malta to claim the 15% tax rate on rental income?

The 15% final tax rate is available to both residents of Malta and non-residents of Malta who own immovable property in Malta and deriving rental income from that property.

How can I take advantage of the 15% tax rate?

Should the 15% final tax rate on rental income be the chosen and most efficient method of taxation then the taxpayer is required to fill in a declaration form and file with the Inland Revenue by the 30th April each year. The declaration form will outline details about the rental property and the rental income for the calendar year (tax basis year) prior to the 30th April. It should be noted that this deadline is separate from the individual self-assessment deadline of 30th June and the various company corporate tax deadlines as prescribed by law.

Does the final tax rate apply every year?

The tax rate on income is an optional choice and is chosen to be applied by the taxpayer each year. The decision needs to be taken annually to see whether this rate of taxation on rental property income is beneficial to the taxpayer. A submission to the Inland Revenue Department in Malta must be made every year by the 30th April in order to take advantage of the 15% tax rate on income.

Are there any exemptions to the application of the 15% tax rate on rental income?

It should be noted that rental income in Malta received from related parties as defined by Maltese legislation is exempt from the final tax rate of 15% on rental income.

This form of taxation is only applicable to rental income gained from properties situated in Malta and thus rental income gained from properties situated outside of Malta is not eligible.

Contact Us for Malta Tax Advice

Malta property taxes can be a complex area and there are several ways that rental income from immovable property situated in Malta can be taxed and you should always seek the guidance of an accountant or tax advisor to ensure you maximise tax efficiency and make the correct filings to the Inland Revenue Department in Malta.

If you require assistance and advice with Malta tax, contact our team today to arrange a consultation by calling us directly on +356 2122 7553 or email us on enquiries@papilioservices.com, and we will respond to you within 24 hours.

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