Taxation of Internet based work for non-dom ordinary residents

I believe that if you are working via the internet and are connecting to it here in Malta you are regarded as working in Malta and thus subject to Maltese taxation.

Out of curiosity what is meant by remitted income - and taxed on remittance basis?

remit = to send

non Maltese citizens living in Malta are only taxed on income they remit to Malta (or earn in Malta) - if you leave it outside Malta there is no tax due in Malta

I think I am with George on this, Where is your company registered and file accounts, is it in EU or another country. The way you are writing this sounds like it's ofshore and almost an attempt to avoid TAX anywhere. If so then you should pay tax on the amount you bring into Malta. TAX reduction is good, TAX avoidance is a crime. Bank the big sum ofshore bring in just what you need to sustain your living/business and get an accountant to claim every penny you spend back against what you bring in. Example when you buy us all a beer save the receipt and claim it as business entertainment expences. We would allow this. Jim

Jim - just to clarify, I didn't express an opinion as to what petr should do, merely stating the tax law on worldwide income

if accounting firms don't agree on this point, I cant see much point on getting the opinion of the rest of us. Either ask the inland revenue for a ruling, or get an accountant to put in writing that this is overseas income.

cool George, I am sure it is one of these circumstances that depending on how you ask the question will differ the answer if you follow.
I think the simple answer/question is where do you pay tax and how much, not do you ?. An account should be able to advice on that.

Jim

Thank you for your feedback.
First of all, there is nothing wrong with using offshore structures to optimise tax. Tax avoidance is one thing, tax reduction is another. Malta has non-dom remittance taxation basis for foreign source income for a reason - to attract people who want to minimise tax. All legal. Tax optimisation is used by vast majority of large and medium size businesses worldwide as well as savvy inddividuals. Non-domicile remittance basis for taxation of individuals is one of the components of tax optimisation.

The issue is how Inland Revenue Malta views Internet based work. This must be a common issue in Malta - I believe there are many non-dom professionals staying on ordinary residence who work online, day in, day out, and they only remit portion of that income into the country (taxing it accordingly as per progressive scale). I am finding out that some accountant companies either do not know for sure, or they steer you into setting up Maltese company, etc., basically trying to take one for a ride. I am not an expert, but I know the difference between professional advice and someone trying to sell the service.

I got a couple of "it is a great area" answers from tax firms, but that is only confirmation of ambiguity of the subject.

I will keep trying to identify official stand of Inland Revenue of Malta, perhaps contacting them directly and getting my answer in writing is way to go.

I would have said tax evasion is a crime - whereas tax  avoidance is not...

I suspect that the reason the accountants don't know is that 1) the law doesn't cover it explicitly and 2) most people in your situation take it for granted that whatever Internet stuff they do is clearly NOT the same as working in Malta.
To clarify this legally, there would likely have to be a ruling by the courts on how to interpret that law. Since the accountants don't know, there doesn't seem to have been a ruling like that in any similar case.
I think most people would find it far-fetched to consider your situation as "working in Malta", not least because the business is located elsewhere.
To avoid the conundrum altogether, couldn't you spend some months of the year outside of Malta and claim to do all the required work there?
Just my musings.

Georgeingozo  certainly seems to know what he's talking about
If you need advice however, please to refer to a tax professional . Maybe you could ask for  tried and tested professional tax advisors by Georgeingozo or other members of this forum .

sunshinemalta wrote:

Georgeingozo  certainly seems to know what he's talking about

thank you - if I post often enough, I'm bound to get it right occasionally :-)

sunshinemalta wrote:

If you need advice however, please to refer to a tax professional . Maybe you could ask for  tried and tested professional tax advisors by Georgeingozo or other members of this forum .

Agree - sometimes its best to go to a professional - free advice can prove very expensive. I can recommend John Huber - I've used him for 9 years and always been very happy with his advice, both when he was at KPMG and now he's independent (John Huber Associates) - no, I don't work for him, and no I'm not related to him, just very happy with his advice - many others on the forum also use him

ps if you look at the photos/videos of the finance minister talking about the new scheme, thats John sitting next to him - if he doesn't know about the new scheme, nobody does

did you get any reply on this? My query is how would you remit just a portion in Malta - I mean the auditor would see the original full invoice? Or you issue a second invoice to yourself?