Before becoming an expat and either working or retiring in Malta, taxation will likely be one of your biggest concerns. It is; therefore, best to be aware of the tax system in Malta before expatriating. Generally speaking, the tax rate is low in Malta and the taxes are categorised into different social circumstances. Corporate tax rates are low, attracting companies and entrepreneurs to the island.
Income Tax
Temporary residents in Malta do not pay any tax. Permanent residents pay tax according to their marital status and employment type, categorised by a bracket system. You become eligible to pay taxes when you have been a resident for 183 days in a calendar year. This applies to expats, regardless of their country of origin. Here is the breakdown from 2017:
Singles:
- €0 to €9,100 – 0% (no tax relief)
- €9,101 to €14,500 – 15% (€1,365 tax relief)
- €14,501 to €19,500 – 25% (€2,815 tax relief)
- €19,501 to €60,000– 25% (€2,725 tax relief)
- €60,000 and over – 35% (€8,725 tax relief)
Married couples:
- €0 to €12,700 – 0% (no tax relief)
- €12,701 to €21,200 – 15% (€1,905 tax relief)
- €21,201 to €28,700 – 25% (€4,025 tax relief)
- €28,701 to €60,000 – 25% (€3,905 tax relief)
- €60,001 and over – 35% (€9,905 tax relief)
Parents:
- €0 to €10,500 – 0 % (no tax relief)
- €10,501 to €15,800 – 15% (€1,575 tax relief)
- €15,801 to €21,200 – 25% (€3,050 tax relief)
- €21,201 to €60,000 – 25% (€3,050 tax relief)
- €60,001 and over – 35% (€9,050 tax relief)
Married couples can choose to pay taxes at the single rate, while parents may benefit from a special rate. Be sure to check your country’s taxation rules as Malta has a Double Tax Treaty with many countries; you could pay double when not necessary.
Registration as a Taxpayer
Upon receiving your work and resident permit, you must complete and sign the Expatriates Taxpayers Registration Form and produce to the Inland Revenue Department.
Deadlines and Payment
The tax system in Malta follows the calendar year, ending the 31st December. Expats must submit the previous year’s tax return by no later than 30th August of the current year or penalties will apply. To receive your tax return by post you simply have to complete it and produce it to the Inland Revenue Department, along with the payment cheque. You can also make online payments through the Inland Revenue website.
