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Income tax in Malta

Hi all,

Just joined this forum as I'm considering possibly moving to Malta from Ireland. Essentially just looking to live somewhere that I can do outdoor water-based activities year-round and still be able to earn a decent enough wage in the IT industry.

I have a few queries about income and taxation...

- I understand there is a special arrangement for foreign workers, but not fully clear on what this is. Is it just 25% tax up to the first €60K? Do you need to register as a foreign worker to get a special rate or something like that?

- Do most workers from Ireland/UK typically get paid into their bank accounts at home, or is it better to setup one there?

- Do you need to register in Malta prior to taking up a job (or to get a medical card), or is that usually handled by the employer (assuming it will be one of the larger IT-industry employers) ?

Many thanks and apologies in advance if these questions have been asked a thousand times ;)

- the tax rates you mentioned isnt special, thats just normal rates. https://ird.gov.mt/services/taxrates.aspx
- local accounts better
- your employer will tell you the process, its a multi pronged thing they have to do some stuff

StimpsonJ - I think you are referring to this scheme: https://ird.gov.mt/taxguides/qualifiedpersons.aspx

Start off by checking if you meet the requirements.

Many thanks for the details. Those are the pages I found alright when I searched on Google. I saw many articles/videos online about the "low income tax" being a major draw for foreign workers so wanted to be sure I wasn't missing anything. It's slightly better than the income tax in Ireland, but nothing groundbreaking.

Doesn't look like I'd qualify for the special rate either.

I'm going to pop over for 2 weeks in October to get a sense of the place before I commit to anything. I've travelled extensively but somehow Malta has skipped my radar (closest I've visited is Sicily which I love).

My requirements for moving somewhere were essentially:
- Good weather year-round
- Near coast
- Jobs in IT that only require English (I have tourist-level Spanish, but not sufficient enough yet to converse in any serious way)

Anywhere else I should consider? Perhaps Malaga, Spain or the Algarve, Portugal?

Foreigners can get very good taxes. Very good indeed. But typically you would be self employed working for foreign clients to get those.

I am in IT, igaming has good opportunities with foreign companies - people right now looking for good devops folk that I know of for example - and English is there the spoken language as lots of foreigners in that space. I would look there, seems there are some specialist recruiters in that field

Personally I consult to American companies so not really up to speed with how things are going

Interesting, I'm open to the consulting aspect should the opportunity present itself.
Practically all the online job searches seem to be for full-time positions. Any good contracting sites I should look at to put forward my CV?

Yes lots of work in iGaming and Fintech, which is good. Salaries are certainly lower than in Ireland, but cost of living is less so I assume it balances out.

I would also consider Oz or west coast US, but problem is the distance to travel home (which I plan to do every 2 months or so for long weekends).

Yeah seems here you can expect 60k at the very top of the pile in IT, quite a bit less for typical. Bit of a shame.

I have no idea about contracting sites my clients tend to find me via word of mouth or seeing me speak at conferences or whatever. Working remote for foreign companies with deep pockets living in Malta really is ideal

Mind me asking what the tax rate is for foreign-sourced income (i.e. if I did get a contract with a foreign company but lived on in Malta) ?

You have to set up a pricey company structure with expensive accountants.

Then you can get 5ish% corp tax. No tax on income not brought to Malta. The rates as per above URL for what you do bring.

Quick question sry about butting in what about just normal freelancing withut setting up the pricey accountants and company. I have just bee quoted 8,000 for moving my company to Malta which is really just me and my laptop, all my work is conducted and sourced globally. Planning on putting roots down in malta.

You become tax resident in Malta you have to file tax returns and declare income earned while in the country - and get taxed on it.

Afaik of you are employed your co has to register itself locally as a employer to pay PAYE and NI even if it's not resident here etc

Foreign dividends may not be taxed thoigh. You should at least go talk to an accountant who can tell if what you have and how you work is legal and what it means. Thus determining if you need the structure.

Exploratory advise tend to be free. Feel free to priv msg if you want an intro to a good accountant.

Thanks I will message you in the morning regarding the accountant it's getting late where I am now

As a freelancer, you have to pay tax on your income - of course !
It only depends in which country you are taxable.

If your company is registered abroad, you are taxable there, when you are registered as self-employed in Malta, you have to pay tax here.
In case you are not registered as a freelancer (reg. number/VAT number) anywhere, you are working illegally.

Each country offers lots of "tax exemptions" - and so does Malta. Only a tax advisor can tell you for sure, whether or not you are eligible for any tax benefits.

quote from PWC
"-Malta taxes individuals who are both domiciled and ordinarily resident in Malta on their worldwide income.
-Any person who is ordinarily resident in Malta but not domiciled in Malta is taxable only on income arising in Malta and on any foreign income remitted to Malta
-A non-resident individual is taxed only on income arising in Malta.
"

johnmc100 :

You're making a lot of assumptions but that's expected.

due to lack of information - individual tax situation is quite complex - even here in Malta  :D

VAT is only necessary if you're residing in EU.

Not only in this case.
As self-employed in Malta you need to register at VAT Dept. - but at the same time, you can apply for VAT exemption (threshold 14 k/a) - then you get a "VAT number" without MT prefix :)

volcane :

You have to set up a pricey company structure with expensive accountants.

Then you can get 5ish% corp tax. No tax on income not brought to Malta. The rates as per above URL for what you do bring.

Hi, just following up on this again.

I'm currently working as an IT contractor in Ireland, but obviously missing the good weather in Malta so seriously considering:

a) setting up a base in Malta and relocating there for the majority of the year
and/or
b) purchasing an apartment there and regularly commuting back and forth (and rent out the apartment when I'm not in Malta)

At the moment I'm considering option b, although I'd probably rent initially just to get a sense of the best places to purchase a property. I've visited Malta before and love it and the outdoor lifestyle, plus regular swimming is good for my back so that's the main draw.

My question is: am I eligible for any tax benefits if I am partially resident (i.e. owning a property, but spending perhaps 3-4 months of the year in Malta, and the rest in Ireland), or do I need to fully move to Malta and relocate my business there to gain any tax benefit?

Also you mentioned before that relocating the business to Malta can be expensive, roughly what are the costs and how long does the process take?

you have to spend more than 1/2 the year here to be tax resident.

volcane :

you have to spend more than 1/2 the year here to be tax resident.

Right, and does the business need to be moved to Malta or be based in Ireland?

What are the costs you mentioned before (roughly)?

StimpsonJ :

Right, and does the business need to be moved to Malta or be based in Ireland?

the benefits tend to be for business resident/domiciled here and owned by a holding company in another locality. It's complex, speak to a pro.

StimpsonJ :

What are the costs you mentioned before (roughly)?

depends on your situation, speak to a pro

volcane :

depends on your situation, speak to a pro

It's odd this sort of information isn't summarised on an article somewhere, I would think lots of IT contractors would have done something similar.

StimpsonJ :

It's odd this sort of information isn't summarised on an article somewhere, I would think lots of IT contractors would have done something similar.

legal advise - which more or less this is - is highly tailored to the individual, highly context specific and making wrong decisions can cost you big time or even land you in jail.

Is it really a surprise?

It's quite a generic query though: IT contractor operating as a ltd company taking contracts from abroad. How to operate that business model in Malta.

I imagine if someone has done it, it would be pretty much the same for the next person.

StimpsonJ :

It's quite a generic query though: IT contractor operating as a ltd company taking contracts from abroad. How to operate that business model in Malta.

I imagine if someone has done it, it would be pretty much the same for the next person.

I and several of my friends am doning, you'll be surprised at the variety of setups :)

I guess. A Malta-based accountant is the person I need to talk to right? You mentioned legal, so not sure if you meant a lawyer :)

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