Ordinary Residence in Malta
Ordinary residence in Malta
Malta is a small independent nation located in the middle of the Mediterranean Sea, located between Sicily and the North African coast. Malta joined the European Union on 1 May 2004 and the Eurozone on 1 January 2008.
Malta is an island nation that consists of three islands: Malta, Gozo and Comino. The country’s official languages are Maltese and English. Malta’s capital city Valletta is the European Capital of Culture for 2018.
Taxation of Ordinary Residence in Malta
Persons who intend to reside (or has actually resided) in Malta for a period longer than 3 months are obliged to register/apply for a residence permit (e-Residence card) in Malta.
Persons who are resident in Malta, but not domiciled in Malta, are charged to tax in Malta on any income and capital gains arising in Malta, and on any income (but excluding capital gains) arising outside Malta which is received in (ie remitted to) Malta.
Any income arising outside Malta which is not received in Malta is not subject to tax in Malta. Any capital gains arising outside Malta is not subject to tax in Malta, even if it is received in Malta.
This “remittance basis” of taxation is not applicable to persons who apply for long-term residence or a permanent residence certificate. Such persons would be subject to tax in Malta on a “worldwide basis”.
A minimum tax liability of €5,000 per annum has been introduced with effect from basis year 2018. The minimum tax is payable by persons having an annual income arising outside Malta of at least €35,000.
Ordinary Residence in Malta
Who may apply for an Ordinary Residence permit?
EU/EEA/Swiss nationals have a right to enter, remain and reside in Malta on the basis of employment, self-employment, to study, as economic self-sufficient persons.
Non-EU/EEA/Swiss nationals may also apply, but their rights are not automatic and there are restrictions and conditions imposed, especially with regard to employment/self-employment rights for so-called third-country nationals.
Different requirements may apply when applying for Ordinary Residence in Malta, depending on the nationality of the applicant.
Ordinary Residence requirements
Ordinary Residence in Malta presumes that the person stays physically in Malta for 183 days or more in any calendar year. Persons absent from Malta for work, business or health related absences may still be able to claim Maltese tax residence, depending on circumstances.
Depending on the basis of the application (eg employed, self-employed, economic self-sufficiency), an applicant will need to support an application with information and documentation relevant to the category the applicant is registering under. Applicants will be required to be present in person.
Papilio Services Limited can assist any applicant with the process from beginning to end.
For further assistance, do not hesitate to contact us.