Will live in Malta but work for a foreign company

Vegaanders wrote:

I understand but the basic question in this is if Malta tax money that is taken out on a ATM  in Malta ör used to pay a service in Malta with the card from a foreign bank.
That question someone must be able to answer

I figure it depends on the amount and whether you inform the tax office of it - I mean, how would they know if you don't tell them, and how would they tax you if they don't know...

I, for instance, have two different bank accounts in Austria, I withdraw cash (small amounts for groceries, etc.) at ATMs in Malta from both, or my wife's bank account, but first of all, I don't even keep track of these withdrawals (i.e. how much and when), and secondly, I never even thought of informing anyone of it... (well, except for my wife, of course, if I use her bank card...).

I understand but the basic question in this is if Malta tax money that is taken out on a ATM  in Malta ör used to pay a service in Malta with the card from a foreign bank.
That question someone must be able to answer

They will prob. not notice if its small sums but basicly if you dont tax it (income tax) you are doing tax fraud. Although you will prob. get away with it. From a legal point you need to file it in your income tax statement.

Vegaanders wrote:

Another thing that I have problems with is that you tax also money taken out from a debit or credit card in Malta.
If I have a savings account in Germany and use this money to live on, it is not possible that this money should be taxed in Malta.

Money sourced from capital and remitted to Malta is not liable to tax here but it is a case of when does money put into a savings account become capital!

Ray

mantasmo wrote:

If you are working in Malta (by that I mean the money is actually earned in Malta), even if you work for a foreign client and get paid in a different country, all of that money is taxed in Malta.

Stuff like dividend payments, royalties, true passive income... can often be exempt.

They might not notice/care about relatively small amounts... it's up to you how you structure things. I would very much recommend that you see a tax lawyer (yes a consultation costs a hundred or two but it's worth it IMO).

I dont think this is true. Malta is one of the few countries that does not have cfc rules.
Also only money remitted to Malta is taxed.

Yves81 wrote:

I dont think this is true. Malta is one of the few countries that does not have cfc rules.
Also only money remitted to Malta is taxed.

Only if you aren't resident in Malta. Or it's truly passive income (not work related). Plus there are MANY caveats to remittance including waiting periods before money can be remitted, etc.

CFC doesn't apply here if he is resident. It might apply to a non-resident company though. Or similar setups.

Having your family live in Malta automatically makes you a tax resident in Malta as well.

That's why I suggest speaking to a tax lawyer. Almost everyone on here is clueless.

mantasmo wrote:

Only if you aren't resident in Malta. Or it's truly passive income (not work related). Plus there are MANY caveats to remittance including waiting periods before money can be remitted, etc.

CFC doesn't apply here if he is resident. It might apply to a non-resident company though. Or similar setups.

Having your family live in Malta automatically makes you a tax resident in Malta as well.

That's why I suggest speaking to a tax lawyer. Almost everyone on here is clueless.

This is a very interesting reply, because
1) You sound like you know what you're talking about, and
2)  It's completely the opposite of every thing I've read online from a wide variety of sources, including reports from pretty reputable sources such as Deloitte.

They often mention the difference between domiciled and non-domiciled resident, and a non-domiciled resident (i.e. someone who lives in Malta but was not born there, as far as I understand) is only tax liable on income remitted to a Maltese account or paid from a Maltese company, but not from a foreign company to a foreign account.

It also says that capital or capital gains can be remitted to Malta without incurring taxes.

So I have also been wondering whether it's possible to legally live off existing capital, and save up your entire salary paid from a non-maltese company into my non-maltese account, without incurring taxes of any of it.

I'd appreciate if anyone can recommend a tax lawyer that knows Maltese tax law well.

morganhiggs wrote:

...
They often mention the difference between domiciled and non-domiciled resident, and a non-domiciled resident (i.e. someone who lives in Malta but was not born there, as far as I understand) is only tax liable on income remitted to a Maltese account or paid from a Maltese company, but not from a foreign company to a foreign account.

It also says that capital or capital gains can be remitted to Malta without incurring taxes.

So I have also been wondering whether it's possible to legally live off existing capital, and save up your entire salary paid from a non-maltese company into my non-maltese account, without incurring taxes of any of it.
....

Hi

I am looking at relocating later this year while maintaining UK based employment, and my understanding of it through research is the same as yours - i.e. only money I remit to Malta for day-to-day living expenses from my day job (not capital) may be liable to taxation.

I have found a few Maltese tax advisors online who advertise as being experts in British taxation affairs and am going to address a couple when we are next over. I think it may also pay to take it advice from a UK tax advisor, which is what I'm planning to do, before moving over permanently. There is a double taxation agreement in place but Malta and the UK do not have the same rates by income levels.

Professional advice relating directly to each individual situation is probably the best way forward. There is considerable rhetoric and well-intentioned misinformation on the internet which opens you up to complications and potential fines when dealing with such a serious and complicated matter. Not to say information in this thread is wrong, but I want to be 100% sure my situation is as I think it is and I am paying a fair amount of taxation in both countries.

Best wishes whichever way you decide to do it. 

Dan

*** edited to add - it's against forum rules to pop links up for businesses, but google is your friend and have a look at the business advertisers section on this forum there may be some tax advisors in there too e.g. John Huber and Associates Tax Services Malta who have a good reputation online from what I have found. ****

Cynic wrote:

In general, where you pay tax depends on where you are deemed to live.  My understanding of the Maltese tax system is that If you live in Malta for more than 183 days in any single tax year, then you are deemed as being resident and liable to pay the appropriate tax on any income earned in that period.  However, there is a special rule for foreigners that basically says that you only pay tax on income and capital gains that you actually bring into the country.

So, it appears to be beneficial to become a resident there.

But based on what you said, it would mean that i dont have to pay tax in Germany if i'm in malta for 183 days or more?

Additionally, how does this apply to me who holds a TCN passport but is married to a EU national living in Malta?

MrCowboyEast wrote:

Cynic wrote:

In general, where you pay tax depends on where you are deemed to live.  My understanding of the Maltese tax system is that If you live in Malta for more than 183 days in any single tax year, then you are deemed as being resident and liable to pay the appropriate tax on any income earned in that period.  However, there is a special rule for foreigners that basically says that you only pay tax on income and capital gains that you actually bring into the country.

So, it appears to be beneficial to become a resident there.

But based on what you said, it would mean that i dont have to pay tax in Germany if i'm in malta for 183 days or more?

Additionally, how does this apply to me who holds a TCN passport but is married to a EU national living in Malta?

You do have to declare all of your world-wide earnings in the country of your residence; in this case Malta.  The amount of tax you'll pay and where you'll pay it will be decided by Maltese law and the existing double-taxation agreement between Malta and Germany, you can access a copy at this link.  Basically, the Maltese will decide how much you pay, it just so happens that they treat non-Maltese residents differently to Maltese citizens.

The nationality of your wife has no bearing on your tax affairs; as a TCN, you should be treated exactly the same as any other non-Maltese citizen who is living in Malta, but earning a salary in Germany.

If your tax affairs are complicated, it may well be worthwhile consulting with a specialist tax advisor.

Hope this helps.

Cynic wrote:

If your tax affairs are complicated, it may well be worthwhile consulting with a specialist tax advisor.

Hope this helps.

Yes it does help, my only question is where to find one?  A tax advisor that can help me with German and Maltese law?

MrCowboyEast wrote:

Cynic wrote:

If your tax affairs are complicated, it may well be worthwhile consulting with a specialist tax advisor.

Hope this helps.

Yes it does help, my only question is where to find one?  A tax advisor that can help me with German and Maltese law?

At the top of the page is our Handy Tools section, included in there is an article written by John Huber Tax Associates in Malta who are a member of this Forum.  This is a link to their website.  Because I have never used them, I can't personally recommend them, but I'd recommend you check them out and ask them the question; I suspect they will charge for their services.