Self employed person in Malta

Hello there

As I am planning to relocate to Malta in early February 2014, I have one clarification concerning the self employment status and the taxes linked to it.

Should I pay the 15% income tax rate plus the social insurance of 27€ a week or are there other taxes?

Thanks a million
Rico

Hello Rico,

From what I know and from my own experience as a SE in Malta too, your only contributions will be tax and social security. On you 1st year in Malta as a SE, you will pay a NI fix rate of €27.86 per week, which meeds to be paid every end of April, August and December. Basically, you will need to count how many Mondays are on each period and multiply by €27.86.
From the 2nd year on, your NI rates will be calculated depending on your status (single, married, parent, etc) and your earnings. You can check the rates HERE.

Now, in regards to income tax, you won't need to pay any tax on your first here in Malta too. In my case, they told me not to worry about this year's tax and that I would need to fill a tax form on the beginning of next year which would work my tax rates for the following tax years. They also told me they would do a calculation of how much were my earnings for this current year and I would have to pay some sort of provisional rate. For the following year tax rates, you can check it HERE.

I still need to contact the tax office anyway to make sure everything is fine for this year and to avoid any misunderstanding.

Well, I hope the above info may help you Rico but when you come to Malta, you can always get in touch with the SS and Tax offices and I am sure they will be able to clarify any doubts you may have.

Best of luck! ;)

Antonio

"Rates for Class Two Social Security Contributions are based on the annual net profit or income for the year preceding the contribution payment year."

wot dos that mean exactly ?
preceding year before malta might mean zero (as how would they know what u were paid before), so by that u would pay nothing in ur first year...
if preceding year is ur first year in malta, then it would also mean that u would pay nothing in ur first year for social security... but in ur second year based on ur first year earnings level...

i was told for provisional tax that u get ur rates according to wot u earned 2 years prior... so in ur first year u shouldnt pay any provisional tax, but u square it up in year 2 when u fill in your tax declaration etc (and then hand over wot u owe for ur first year in tax)... then following on from this, provisional tax should only kick-in during the third year...

however, one does get told various things for the same question...