Visitors, Temporary Residents, Permanent Residents

VISITORS AND HOLIDAY HOME OWNERS

If one spends less than six months in Malta in any one calendar year, there is no tax liability. Visitors are allowed to purchase one holiday home valued at more than Lm30,000 for a flat and more than Lm50,000 for a house.
There are no property rates or taxes in Malta.

 

TEMPORARY RESIDENTS

Most foreign nationals would opt for the Temporary Residence Scheme if they have little or no tax liability in their former country of residence. "Temporary" is a misnomer as there are temporary residents who have lived in Malta for scores of years continuously. On arrival in Malta a three month visa is automatically granted as the port of entry. For extensions of visa, applications, together with three passport sized photos should be submitted to: Principal Immigration Officer, Police General Headquarters, Floriana. The first extension is usually valid for a further three months and thereafter extensions are normally for six or twelve month duration. Applications are normally granted, however, one may be asked to show documentary evidence of sound financial position adequate to support applicant and his family. A bank statement would normally be sufficient. Temporary residents who extend their stay in Malta beyond six months in any one calendar year, will be subject to Malta tax on remittances of income made to the Island during the period of stay. Remittances of a capital nature are not taxable. Temporary residents may purchase a residence in Malta which must be valued at more than Lm30,000 for a flat and Lm50,000 for a house. The new tax rates are as follows:

 

Temporary Residents
	Married	Single
First	Lm 4000 is Free	Lm 3000 is Free
Next	Lm 1500 at 15 %	Lm 1000 at 15 %
Next	Lm 1500 at 20 %	Lm 1000 at 20 %
Next	Lm 1500 at 25 %	Lm 1500 at 25 %
Next	Lm 1500 at 30 %	Lm 1500 at 35 %
Excess	35 %	35 %

E.g. A married couple with a join income of Lm4,000 (UK6200) pay no tax; on Lm5500 tax amounts to Lm225 i.e. 4%. Couples with independent incomes may opt for a separate computation in which case the first Lm6000 would be tax free.

PERMANENT RESIDENTS

A new scheme for foreigners to take up residence in Malta came into effect on 1st January 1988. This scheme is of particular interest to those nationals with a relatively high income, who are subject to a high tax rate in their present country of residence. Under the scheme an applicant who is not Maltese must either own assets outside Malta worth the equivalent of not less than Lm150,000 or be in receipt of annual income of not less than the equivalent of Lm10,000. There is no minimum stay requirement.

 

CONDITIONS:

The prospective new resident will be required to remit to Malta at least Lm6,000 per annum plus Lm1,000 per annum per dependent covered by the residence permit; to maintain the capital/annual income requirements each year; to purchase residential premises in Malta at a cost of not less than Lm50,000 in the case of a house or Lm30,000 for a flat or to rent/lease the abode he lives in at not less than Lm1,200 per annum; and not engage in gainful occupation in Malta. Limited gainful activities in Malta may be authorised.

 

CONCESSIONS:

Holders of a Residence Permit under this scheme will be subject to tax on the chargeable income remitted to Malta at a flat rate of 15%, however there shall be a minimum liability of Lm1,000 per annum. Remittances of a capital nature are not taxable.

 

DEATH/SUCCESSION DUTY:

There is 5% stamp duty payable on transmission of property. No Capital Gains Tax is payable when an inherited property is sold.

 

PROPERTY RATES:

There are no property rates or taxes in Malta. Profit on the sale of one's residence is not subject to Capital Gains Tax if sold after three years of ownership.

 

MOTOR VEHICLES:

One private motor vehicle is allowed entry into Malta subject to this being imported within six months from date of issue of Permanent Residence Permit or from date of taking up residence in Malta, whichever date is later. The car must have been registered in the importer's name for at least six months prior to importation. Importation is subject to payment of 15% VAT and a Car Registration Fee of 10% if under 1500cc or 15% if over 1500cc.

 

EXCHANGE CONTROLS:

Any unspent residue of the capital brought to Malta and any income accumulated there from during the resident's stay may be repatriated. Profit/proceeds from the sale of one's residence and/or investments in Malta will be repatriated without restrictions.

 

RETURNED MIGRANTS:

Maltese persons who, after emigrating, return to Malta after an absence of not less than 20 years on aggregate in the last 25 years, will qualify for the taxation concessions without being subjected to the other conditions.

 

TAXATION:

Double Taxation Agreements exist with most EU and western countries. In general terms, such agreements provide for complete exemption in the country of source in respect of such income as Pensions, Annuities, and Royalties provided tax is paid in the country of residence. In the case of income (such as Dividends and Interest) which is subject to a withholding tax in the country of origin, then double taxation relief is granted in Malta by way of deduction.

 

EXCHANGE RATE:

- As at May 2000

Lm1 = UK£1.46 = US$2.3 = DM4.9

 

MALTA:  THE IDEAL DESTINATION

Although the above conditions are most attractive, the outstanding feature which makes Malta an ideal retirement or holiday destination, is the quality of life which results from the welcome and acceptance extended by the local population. This makes it easy for one to join and take an active part in local social, sporting, cultural and philanthropic activities. This interest and participation are encouraged to such an extent that permanent residents may even vote in Local Council Elections.
This contrasts sharply with conditions in other countries such as Spain, Portugal and Cyprus where one's contacts tend to be limited to other foreign nationals living in the same complex.

This quality of life, together with attractive tax rates, mild climate, crime free and clean environment, excellent communications, low cost of living, political stability and a thriving economy do indeed make Malta an outstanding holiday and retirement destination.