Maltese Income Tax

Individuals may be temporarily resident, resident, ordinary resident or domiciled in Malta. Individuals are resident in Malta if they permanently reside there. 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. Individuals are temporarily resident in Malta if their stay there is temporary and they do not reside there for 6 months or more in a year. Individuals who are ordinarily resident and domiciled in Malta are subject to income tax in Malta on their worldwide income and certain capital gains. Persons who are either not ordinarily resident or are not domiciled in Malta are subject to income tax on Maltese-source income and on any foreign income remitted to Malta. Individuals who are temporarily resident in Malta do not pay tax on the income or capital gains arising outside Malta, whether remitted or not. Most forms of remuneration in cash or in kind are taxable: exemptions are granted for certain capital gains, certain pensions, scholarships and child maintenance. There are no personal allowances and no personal tax credits. Married couples are taxed jointly. The tax rates in 2008 for married couples on annual income are as follows: 0% up to EUR 11’400, 15% on income from EUR 11’401 to EUR 20’500, 25% on income from EUR 20’501 to EUR 28’000 and 35% on income over EUR 28’000. The rates for single taxpayers, or married couples opting for separate computation are: 0% up to EUR 8’150, 15% on income from EUR 8’151 to EUR 14’000, 25% on income from EUR 14’001 to 19’000 and 35% on income over EUR 19’000. Income is assessed for tax in the year following the year in which it arises.