Malta - Tax Guide for Freelance Contractors
Welcome to our guide to Malta Taxation. You will find a wealth of information which will be useful if you plan to work in, or place consultants in, Malta.
Our tax guides give a general overview of the actual taxation rates and rules at the time of writing. There are of course many ways to legally reduce tax or social security burdens in Malta. Please contact us for more information or an actual breakdown of your situation, and to find out more about our range of payroll and contact management services in Malta.
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Ordinarily resident and domiciled in Malta: are liable for income tax in Malta on their worldwide income and certain capital gains,
Not ordinarily resident or not domiciled in Malta: are liable for income tax on Maltese-source income and on any foreign income remitted to Malta,
Temporarily resident in Malta: are liable for income tax on Maltese-source income. They are not liable to pay tax on income or capital gains arising outside Malta, whether remitted or not.
Individuals will be regarded as resident if they permanently reside in Malta, except for temporary absences
Individuals will be regarded as temporarily resident if their stay in Malta is temporary and they do not reside there for 6 months or more in a year
Ordinary residence and domicile:
The terms ordinary residence and domicile are not defined under Maltese law, but they adhere to the same principles as in English law. Normally, expatriates who are not of Maltese origin and who do not intend to permanently establish themselves in Malta are not considered to be domiciled in Malta for tax purposes.
Married persons are jointly responsible for filing tax returns and they must declare which of them is to be registered as taxpayer.
Taxable income includes:
- employment income,
- remuneration in cash or in kind.
Certain deductions are permissible for 2012 including:
- interest paid on money borrowed is deductible from income generated by that same money,
- alimony payment under a Maltese separation order,
- certain capital gains,
- certain pensions, scholarships and child maintenance.
A personal tax credit is granted to married or single women who return to employment, provided certain conditions are satisfied.
Income tax rates for 2012:
For single taxpayers
- 0.00% from EUR 0.00 up to EUR 8’500,
- 15.00% from EUR 8’501 up to EUR 14’500,
- 25.00% from EUR 14’501 up to EUR 19’500,
- 35.00% over EUR 19’501.
For married taxpayers
- 0.00% from EUR 0.00 up to EUR 11’900,
- 15.00% from EUR 11’901 up to EUR 21’200,
- 25.00% from EUR 21’201 up to EUR 28’700,
- 35.00% over EUR 28’701.
Filing date:
Individuals are taxed on a preceding year basis. Three provisional payments have to be made by the individual by April 30th, August 31st, and December 21st, except for income on which tax has been withheld at source (employment income). The balance must be paid by June 30th of the year of assessment.