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The tax system in Malta

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Whether you have decided to work or retire in Malta, taxation will probably be one of your main concerns. Indeed, before expatriating to another country, it is best to be aware of its tax system to know what you might owe in taxes. In general, tax rates are rather low in Malta, but these apply to different categories of people. Corporate tax rates are very favourable, attracting companies and entrepreneurs to this island nation.

Income tax in Malta

Temporary residents in Malta do not have to pay tax. Permanent residents pay tax according to a bracket system based on marital status and employment type.

If you are resident in Malta for 183 days in a calendar year, you are required to pay taxes.

This system also applies to expats, regardless of their country of origin. In 2017, the breakdown is as follows:

Singles:

€0 to €9,100 – 0% (no tax relief)
€9,101 to €14,500 – 15% (€1,365 tax relief)
€14,501 to €19,500 – 25% (€2,815 tax relief)

€19,501 to €60,000– 25% (€2,725 tax relief)
€60,000 and over – 35% (€8,725 tax relief)

Married couples:

€0 to €12,700 – 0% (no tax relief)
€12,701 to €21,200 – 15% (€1,905 tax relief)
€21,201 to €28,700 – 25% (€4,025 tax relief)

€28,701 to €60,000 euros – 25% (€3,905 tax relief)
€60,001 and over – 35% (€9,905 tax relief)

Parents:

€0 to €10,500 – 0 % (no tax relief)
€10,501 to €15,800 – 15% (€1,575 tax relief)

€15,801 to €21,200 – 25% (€3,050 tax relief)
€21,201 to €60,000 – 25% (€3,050 tax relief)
€60,001 and over – 35% (€9,050 tax relief)

Married couples can choose to pay taxes at the single rate, and parents may benefit from the special parent rates.

Malta has a Double Tax Treaty with many countries, so be sure to check your home country’s taxation rules to ensure you do not pay double when it is not necessary.

Registration as a taxpayer

Once you have received your work and resident permit, you are required to duly fill and sign the Expatriates Taxpayers Registration Form, which you then have to produce to the Inland Revenue Department.

Deadlines and payment

The tax year for Malta follows the calendar year, so it ends on December 31st. You are required to submit your previous year's tax return at the latest on the 30th of August of the current year. Otherwise, penalties should apply.

Receiving your tax return by post is possible. You simply have to fill it and produce it to the Inland Revenue Department along with the payment check. You can also make online payment through the Inland Revenue website. There are thorough FAQs should you have any trouble with the system.

 Useful links:

Inland Revenue Department
Inland Revenue – Tax declaration form

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
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