Malta: Little Known Tax Haven within EU

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malta tax havenMalta, Europe’s most densely populated country, is perhaps best known for tourism. It also boasts a fascinating history, an island that has granted safe haven to everybody from pirates and crusaders to modern-day hospitaller orders. Malta is an English speaking country where cars drive on the left. It’s one of the newer members of the European Union, and its currency is the euro.

Malta is not particularly attractive for offshore banking or companies. Though it is free of currency controls, has a stable banking system and you can easily open accounts there in various currencies, do not expect banking privacy in Malta.

Many tax exiles, however, are checking out Malta to see if they would like to call it home longer term. Like Andorra, Malta is a relatively affordable European tax haven to retire to and set up official residence – you can probably afford to buy a house with a pool in Malta, even if you can’t afford a studio in Monaco! Unlike Andorra or Monaco, Malta is in the European Union. Also unlike Andorra and Monaco, Malta does not have minimum stay requirements for official residents.

Although Malta is not tax free, you can effectively cap your tax at just €4,192 per year. Those who apply under the Residents Scheme Regulations, 2004 (the Maltese retiree program) and satisfy the few conditions stipulated  will be provided with a certificate issued by the Commissioner of Inland Revenue (Malta). This certificate has a dual purpose: First, it acts as a Malta permanent residence permit issued in terms of Article 7 of the Immigration Act. Secondly, it confers on the individual a special Maltese tax status which entitles him/her to these considerable income tax benefits.

Residents with this status must pay a flat rate of 15%  on your local Maltese income (including capital gains) and on his foreign income remitted to Malta. There is a minimum tax of €4,192.  Foreign source income not remitted to Malta – in other words, your entire worldwide income whether it be earned, unearned, capital gains or whatever – is not taxable at all.

It gets better. Persons in possession of this type of Malta residence certificate can also claim double taxation relief in respect of tax paid outside Malta on any income remitted to Malta which is subject to tax in Malta.  This applicability of this benefit is increasingly available giving the very wide network of double taxation treaties that Malta has now concluded.

Who is eligible for the Maltese Retirement Program?

Any non-Maltese citizen, no matter whether an EU citizen or not, may apply for the above-mentioned residence certificate by providing documentary evidence that he /she:

  1. can bring into Malta an annual income of not less than €13,950 in his respect and a further €2,300 in respect of each dependant; and
  2. has either an annual income of not less than €23,000 arising outside Malta or has in his possession a capital of not less than € 349,000; and
  3. will take up residence within one year of being approved.

Within one year of residence approval, the individual must purchase or rent a home in Malta. If the Maltese home is bought, it should cost at least €69,000 in the case of a flat, or at least €116,000 if it is a house. If the applicant decides to rent instead of buying, the rent paid must be at least  € 4,150 per annum.

Note: Interested in tax havens, retirement and residence? Please feel free to browse The Q Wealth Report site for more useful free information like this.

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5 thoughts on “Malta: Little Known Tax Haven within EU”

  1. Well said. The major drawback of the Malta permanent residence permit is that its holder may not work in Malta. Nevertheless this prohibition does not apply to work outside Malta. This means that often this permit may be used by persons who want to use Malta as their base to work in other countries. Moreover,in the case of non-Eu nationals, the permit holder would be entitled to a uniform residence permit (which is normally compulsory for third country nationals) which should allow him/her to travel without undue restrictions to other countries in the EU. Therefore the permit also facilitates intra EU travel for third country nationals.

  2. what is your opinion on " dynasty trust accounts" … they have a long life span and there are many tax benefits…

    Thank you.

  3. Sounds like a great reason to move to Malta!

    We've always thought it's a great place for a holiday, but it certainly has excellent benefits as a long term domicile as well if you're looking to live somewhere sunny, attractive and with great tax benefits!

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