Lowest tax rates in Malta

Malta is not only for its low tax rates, but it is also one of Europe’s fastest developing countries. Part of this development is due to the introduction of the citizenship by investment program, accepted by the EU. In addition, Malta also introduced several residency by investments programs, to help foreigners significantly reduce their taxes.

The High Net Worth Individual program launched in 2011 has become quickly popular among third country nations, but also for EU citizens who started to move their residency to Malta, because of the important tax benefits.

In 2014, the Maltese Government launched the Maltese Global Residency Rules for third country citizens and the Maltese Residency Program Rules, which provide even more tax advantages for EU citizens. All these measures created by the Maltese government have made Malta one of the countries with the lowest tax rates in Europe.

Maltese Residency Program Rules

Only EU citizens, citizens from the EEA and Switzerland can benefit from this option. The program stipulates that Maltese residents only have to pay a flat tax of 15,000 euros annually. If the taxpayer does not bring their worldwide income to Malta, there are no more taxes to pay. The worldwide income brought to Malta is taxed at a flat rate of 15%. Residents can move to Malta with their families and they are not accountable for any further tax liability. The lump – sum tax must be paid to the Inland Revenue by the end of April, each year.

If EU citizens move to Malta for work, they may pay the general tax rates, just like any other Maltese citizens. The Residency Program Rules is considered a separate scheme and tax relief applies only to participants in the program.

The applicants must purchase or rent properties in Malta. The value limit for the properties that qualify for the program depends on their location. The minimum purchase price in northern and central regions is 250,000 euros, while in the southern side of Malta and on the Gozo island the price limit is lowered to 220,000 euros. The amount of the rent is determined in the same way. The minimum annual rent paid is of 9,600 euros in the central and northern regions and of only 8,750 euros in the southern regions and on Gozo island.

The High Net Worth Individual Program

Individuals who may benefit from the rules of this program are EU citizens, citizens from Iceland, Norway and Lichtenstein, Swiss citizens and any other individuals who are non – EU citizens.

EU citizens, EEA citizens and Swiss citizens may apply to the Commissioner of Inland Revenue for special tax status if they satisfy the following conditions:

• The applicant must hold a qualifying property holding;
• The applicant does not benefit from the Residence Scheme Regulations or the Highly Qualified Persons Rules;
• The applicant is a EU citizen, a citizen of Iceland, Norway or Liechtenstein or a Swiss citizen;
• The applicant receives a stable income or regular resources that are sufficient to maintain themselves and their dependents without recourse to the social assistance system in Malta;
• The applicant has a valid travel document;
• The applicant is in possession of a sickness insurance, which covers themselves and their dependents in respect of all risks across the EU;
• The applicant is not domiciled in Malta and does not intend to establish their domicile in Malta for the following 5 years since the date of the application;
• The applicant is a fit and proper person.

Non – EU citizens must satisfy the following conditions in order to apply to the program:

• The applicant must hold a qualifying property holding;
• The applicant may not spend more than 9 months in a calendar year in Malta, in case the person declares they don’t intend to become a long – term resident of Malta;
• If a person does want to become a long – term resident in Malta, they have to become a party of a qualifying contract, basically an agreement between the Maltese Government and the applicant, wherein the applicant contributes a certain amount to the Government of Malta;
• The applicant must not benefit from the Residence Scheme Regulations or the Highly Qualified Persons Rules;
• The applicant receives a stable income or regular resources that are sufficient to maintain themselves and their dependents without recourse to the social assistance system in Malta;
• The applicant has a valid travel document;
• The applicant is in possession of a sickness insurance, which covers themselves and their dependents in respect of all risks across the EU;
• The applicant is not domiciled in Malta and does not intend to establish their domicile in Malta for the following 5 years since the date of the application;

The applicant is a fit and proper person.