Close

Taxation for UK residents on Malta

Recommend

I am NOT a Financial Advisor, I am just another expat. If in doubt seek professional advice.
This is my interpretation on Malta tax liability and double taxation.
This is a practise, as a UK Expat, that I follow and I do not pay tax, in Malta, on any of my pensions.

Information

Everyone is required to register for Income Tax if resident on Malta.  

In general, individuals are considered to be resident in Malta if they spend more than 183 days in a calendar year in Malta. 
(Whether you are liable to pay any tax will depend upon your circumstances.)

Quote:
An individual, who is either resident in Malta or domiciled in Malta, but not both, is subject to tax on income arising in Malta, on income arising abroad but received in Malta, and on capital gains arising in Malta. Individuals who are neither resident in Malta nor domiciled in Malta (temporary residents) are subject to tax only on income and capital gains arising in Malta.

This includes the use of Credit/Debit cards connected with any bank outside Malta.

Transfer of savings does not (usually) attract tax.

Registration may be done by attending either of the two offices in Floriana, Malta or Rabat (Victoria) Gozo.

Malta:    Block 4, Vincenzo Dimech Street, Floriana.

Gozo:    Enrico Mizzi Street, Victoria

https://ird.gov.mt/

Double Taxation Convention

Malta has Double Taxation agreements with many other States to prevent taxes being imposed twice in many and various situations but for most people on this forum, the biggest area of concern is pensions. 

A list of all States with which Malta has agreements may be found here: 
www.financemalta.org

Reference to the 'Double Taxation' query and discussion.  (UK only)

This is my understanding of the Agreement between Malta and the UK regarding this issue and should be read from the perspective of being on Malta, paying taxes to Malta and what Malta has agreed with the UK. (If one was in the UK then obviously the perspective would be reversed.)

Specific reference is made to 

UK/MALTA DOUBLE TAXATION CONVENTION
SIGNED 12 MAY 1994
Entered into force 27 March 1995
Effective in United Kingdom from 1 April 1996 for corporation tax and from 6
April 1996 for income tax and capital gains tax
Effective in Malta from 1 January 1996

Available here: 
www.gov.uk

Article 18 Pensions.

(1) Subject to the provisions of paragraph (2) of Article 19 of this Convention, pensions and other similar remuneration paid in consideration of past employment, or any annuity paid, to a individual who is a resident of a Contracting State shall be taxable only in that State.

Para (2(b)) of Article 19 states: (b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

This means to me that in regard of income sourced from pensions, one can only be taxed on Malta if one is a Maltese National and resident here. If one is not both then this does NOT apply.

Also and according to UK  HMRC: 

most pensions - most UK government (eg civil service) pensions are only taxed in the UK

See: www.gov.uk

Process

All relevant income derived from or remitted to Malta should be declared on the Malta tax return and that includes pensions. Attach a copy of the relevant P60's and let the office apply the convention. It is advisable to attach a letter to any tax return further explaining the circumstances. It is important to attach copies of P60s because that proves income and tax already paid.

Recommend
redmik ViP
Member since 18 October 2012
Malta
Write a comment
Latest articles written by redmik

See also

You are perhaps already aware that Maltese tax rates are rather low. Temporary residents, for their part, do not have to pay tax in Malta.
On the 1st October 2012 Legal notice L.N. 317 of 2012 INCOME TAX ACT (CAP. 123) Malta Retirement Programme Rules, 2012 was published.
The following article gives a brief overview on the procedure and purchase terms for real estate in Malta.
The objective of a recently introduced scheme is to attract highly qualified persons to occupy “eligible office” with companies licensed and/or recognized by the Malta Financial Services Authority. The rules for the scheme came into force with effect from 1 January 2010 and apply to income which

Expatriate health insurance in Malta

Free advice and quotation service to choose an expat health insurance in Malta

Moving to Malta

Find tips from professionals about moving to Malta

Travel insurance in Malta

Enjoy a stress-free travel across Malta

Flights to Malta

Find the best prices for your flight tickets to Malta