Expat tax in Malta


Malta, already an attractive destination for UK expats, is set to become even more attractive as new tax rules have been introduced to further improve an already favourable tax regime.

With no inheritance, wealth, or annual property taxes in place in Malta, expats often venture there to both work and retire. Now, new changes have further relaxed income tax too.

Expatriates working in Malta will now be taxed just 15 percent on all the income they derive from Malta, half as much as the previous rate of 30 percent. Any income sourced from outside Malta is completely tax free, as are capital gains from outside Malta.

However, to qualify for this special rate expats must meet certain requirements.

The expat must not be a habitual resident or domiciled in Malta. Also, the expat must have professional qualifications or be highly skilled in specific sectors including: Chief Executive Officer, Chief Risk Officer, Chief Financial Officer, Chief Operations Officer, Chief Technology Officer, Chief Investment Officer, Portfolio Manager, Senior Trader/Trader, Senior Analyst (including Structuring Professional), Actuarial Professional, Chief Underwriting Officer, Chief Insurance Technical Officer, Head of Marketing, Head of Investor Relations.

The expat must also claim a salary of £75,000 or more.

For expats who want to retire in Malta there are different requirements/tax rates.

If you are an EU national who is not domiciled in Malta then you have free reign to retire there and enjoy very favourable tax rates. Any capital gains received will be remitted free from tax, meaning that if you retire with the intention of living off capital you can live completely tax free. There also special investment structures that can help you minimise tax.

By utilising a QROPS pension transferyou will be able to claim your pension tax free as income is only taxed if it is remitted into Malta.

Another method of retiring in Malta is by entering into the Permanent Resident Scheme (PRS).

PRS is attractive option for retired expats who wish to live in Malta. The PRS allows people to become permanent residents even if they spend less than six months in the country. Income tax is payable at a flat rate of 15 percent, and any income sourced outside of Malta is tax free, as is capital gains tax.

To be eligible for the Malta PRS you must- possess an income of 23,000 a year or higher, or own assets outside of Malta worth 349,000 or more. You are also required to purchase a property in Malta, either a flat costing at least 69,000 or a house worth 116,000.

However, if you have a UK pension you may be required to pay tax on it through HMRC, who may also challenge the amount of time you are spending in Malta. An easy solution to this though is the QROPS pension transfer. By using a QROPS you will transfer your UK pension out of the UK and render it un-taxable by HMRC, completely legally and approved by HMRC.

These tax bonuses are one of the main reasons why workers, businesses and retirees are choosing to leave the UK and venture to Malta.