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Malta Individual - Taxes on personal income

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Malta taxes individuals who are both domiciled and ordinarily resident in Malta on their worldwide income.

Any person who is ordinarily resident in Malta but not domiciled in Malta is taxable only on income arising in Malta and on any foreign income remitted to Malta (i.e. on income and chargeable gains arising in Malta and on income outside Malta that is received in Malta). Such persons are not taxable in Malta on income arising outside Malta, which is not received in Malta, and on capital gains arising outside Malta, regardless of whether they are received in Malta, or otherwise.

However, persons who are married to an individual ordinarily resident and domiciled in Malta are subject to a worldwide basis of taxation (and not on a source and remittance basis).

A non-resident individual is taxed only on income and chargeable gains arising in Malta.

Individuals are subject to tax on income arising in a calendar year (i.e. the basis year), which is assessed to tax in the year following the year in which it arises (i.e. the year of assessment).

Personal income tax rates

Income is taxable at graduated progressive rates, ranging from 0% to 35%. For year of assessment 2020 (year of income 2019), in the case of single individuals (including married individuals opting for separate computation) there is a tax liability of EUR 12,275 on the first EUR 60,000 of income (individuals earning up to EUR 19,500 will save up to EUR 90 tax per annum). Married individuals will be liable for EUR 11,095 tax on the first EUR 60,000 of income (couples earning up to EUR 28,700 will save up to EUR 120 tax per annum). For amounts exceeding these thresholds, the tax rate is 35% for both single and married individuals. Subject to certain conditions, the married rates also apply to single parents, widows/widowers, and separated parents.

Basis year 2019

Tax rates for basis tax year 2019 are as follows:

Married resident taxpayers

Taxable income (EUR) Rate (%) Deduct (EUR)
From To
0 12,700 0 0
12,701 21,200 15 1,905
21,201 28,700 25 4,025
28,701 60,000 25 3,905
60,001 and above 35 9,905

Single resident taxpayers (or married couples opting for a separate computation)

Taxable income (EUR) Rate (%) Deduct (EUR)
From To
0 9,100 0 0
9,101 14,500 15 1,365
14,501 19,500 25 2,815
19,501 60,000 25 2,725
60,001 and above 35 8,725

Parent rates

Taxable income (EUR) Rate (%) Deduct (EUR)
From To
0 10,500 0 0
10,501 15,800 15 1,575
15,801 21,200 25 3,155
21,201 60,000 25 3,050
60,001 and above 35 9,050

The parent rates can be claimed by individuals who maintain under their custody a child, or pay maintenance in respect of their child, where:

  • such child is less than 18 years of age (or between 18 and 23 years of age if attending full-time education at a university, college, or other educational establishment ), and
  • such child is not gainfully occupied, or, if gainfully employed, does not earn more than EUR 3,400 per annum.

The parent rates provide more preferential tax bands in lieu of single/separate tax rates.

Individuals, who in terms of Maltese tax laws are:

  • considered as ordinarily resident but not domiciled in Malta (and who therefore are subject to income tax in Malta on a source and remittance basis)
  • are not subject to any other minimum tax threshold under Maltese law, and
  • during the calendar year preceding the year of assessment derived (together with their spouse, in the case of couples married and living together) income arising outside Malta of at least EUR 35,000 or equivalent, which was not received in Malta,

will be subject to a minimum tax in Malta of EUR 5,000 for the said year.

In calculating such minimum tax liability, any tax paid in terms of Maltese income tax law, whether by withholding or otherwise, will be taken into account, unless it is a final tax paid on the transfer of immovable property situated in Malta. The said minimum tax liability of EUR 5,000 will be calculated before double tax relief.

A reduced income tax rate of 7.5% applies in respect of income derived by registered professional football or waterpolo players, athletes, or licensed coaches.

Subject to the satisfaction of a number of conditions, income derived from part-time work may qualify for a reduced tax rate of 15%, subject to a capping of EUR 10,000 per annum for part-time employment and EUR 12,000 per annum for part-time self-employment. Taxpayers may opt not to avail of this tax rate, in which case tax on such income will be charged at normal rates.

Tax rebates for pensioners ensure that pensioners whose pension income exceeds the tax-free bracket will have an increased amount of their pension income that is not subject to income tax. This benefit applies to individuals who are in receipt of income from any pension, including social security pensions, treasury pensions, as well as other local and foreign pensions, and who are at least 61 years of age in the year when such pension is received. Tax rebates will not give rise to any refunds of tax nor can these be carried forward if not fully utilised.

The tax credits have been increased as of year of assessment 2020 for individuals contributing or making payments to a personal retirement scheme or a long-term contract of insurance or employers/employees contributing to an occupational pension scheme.

Different types of programmes available for individuals

The Global Residence Programme is aimed at attracting more third country national individuals in taking up residence in Malta without taking up employment in Malta, with foreign-source income remitted to Malta by the beneficiary or its dependants being taxed at a flat rate of 15%, subject to a minimum tax of EUR 15,000 per annum. Beneficiaries should satisfy a number of qualifying criteria in order to be eligible for the beneficial tax treatment. In particular, applicants must hold immovable property in Malta for a purchase price of not less than EUR 275,000 (with lower thresholds applicable in the case of property situated in certain areas in Malta and/or Gozo). Alternatively, individuals may rent property in Malta for an annual rental payment of not less than EUR 9,600 (with lower thresholds applicable in the case of property situated in certain areas in Malta and/or Gozo).

The Residence Programme Rules 2014 (RPR) replaced the High Net Worth Individual Rules. The RPR reflects the same scheme as that provided under the Global Residence Program, but the former  may be availed of by European Union (EU)/European Economic Area (EEA)/Swiss nationals who are not permanent residents of Malta. Under the RPR, similar to the position under the Global Residence Programme Rules, any foreign income derived by beneficiaries or their dependants and remitted to Malta is taxed at the reduced rate of 15% (flat rate), subject to a minimum tax of EUR 15,000 per annum.

A Malta Retirement Programme is also in place, which is targeted at EU/EEA/Swiss pensioners in receipt of periodic pension income. Such pension income must constitute at least 75% of the pensioner's chargeable income, and such pension must be received in Malta. A number of other statutory conditions apply in order to be eligible for the said programme. Again, under this programme, foreign-source remitted income is taxed at 15%, subject to a minimum tax liability of EUR 7,500 per annum and an additional EUR 500 per each dependent, per annum.

Subject to the satisfaction of a number of conditions, a returned migrant may elect to be taxed on a source and remittance basis (rather than on a world-wide basis). In this case, foreign-sourced income received in Malta exceeding the tax-free brackets of EUR 4,200 for single taxpayers and EUR 5,900 for married taxpayers will be subject to income tax at a flat rate of 15%, subject to a minimum tax liability of EUR 2,325 per annum.

The United Nations (UN) Pensions Programme Rules, 2015 are designed to attract foreign pensioners retiring from the United Nations. Similar to the Global Residence Programme and other programmes already in place, applicants must satisfy a number of conditions, including holding immovable property in Malta for a purchase price of not less than EUR 275,000, or EUR 220,000 for property situated in certain areas. Alternatively, individuals may rent property in Malta for an annual rental payment of not less than EUR 9,600, or EUR 8,750 for property situated in certain areas. A beneficiary who should receive at least 40% of the UN pension or a widow’s/widower’s benefit in Malta is not subject to income tax on such income in Malta. Other foreign-source remitted income should be taxed at a flat rate of 15%, subject to a minimum tax.

The Qualifying Employment in Aviation (Personal Tax) Rules, 2016 were introduced with the aim of attracting EEA/Swiss and third country nationals not domiciled in Malta to hold an eligible office in the aviation sector in Malta. By virtue of these Rules, eligible individuals may benefit from a beneficial tax rate of 15% on employment income from such activities, subject to receiving an annual income of at least EUR 45,000 and subject to the satisfaction of certain other conditions.

Beneficiaries in receipt of employment income from a qualifying employment in maritime activities and the servicing of offshore oil and gas industry activities may, subject to the satisfaction of certain conditions, opt to be taxed on such income at a flat rate of 15%. The qualifying contract of employment should give rise to a minimum salary (excluding fringe benefits) of EUR 65,000 in respect of a year of assessment.

Last Reviewed - 02 September 2019

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