Tax on self employed income

Hi,

I'm an EU national currently working self employed in the UK. I'm looking for more sunshine in my life, and a laid back life style. I recently split my time between the northern hemisphere and southern hemisphere, escaping the worst of winter, and enjoying an eternal Spring/Summer.

That being said I'm now keen to stay close to continental Europe, and Malta seems a good fit for my lifestyle.

What I'm curious about (and it's far too early really to talk about this) is the tax situation. If spending 183 days a year in Malta, I'd need to register myself there, which for self employed people seems fairly straightforward, but I'd also be liable for tax there too, or would I?

As a writer/publisher online, my income is earned wherever I physically do the work, but payment almost exclusively comes from UK companies, and is paid in GB.

With that in mind,  where would the bulk of my tax liability be? Would it be in the UK, and then again (minus double taxation) on anything I bring into Malta, or could I claim it all in Malta?

Another thing to consider is that currently I'm under the UK limit for VAT, so don't have to charge that to my clients, but the UK seems unique in having this type of threshold, so presumably I would have to add this to invoices if I were based in Malta.

Based on an arbitrary income figure of €60,000, and €5,000 costs, what would the likely tax liability be for a self employed individual in Malta.

As I alluded to at the start, I'm more interested in way of life than tax, but would loathe to be massively out of pocket.

On the surface its fairly easy, but if you want a setup that works in your favour I'd suggest speaking to a profesional who can advise you.

Malta has various benefits for expats in it's tax system but getting this info on your own can be a pain.

A quick google for 'malta tax calculator' though will tell you the story about basic income tax.

Contact "Chetcuti Cauchi Malta". They'll be able to help you if you're anywhere > 35-40k.

I suppose the other option would be to spend less than 182 days there so I'm still classed as UK for tax purposes. It's all just hypothetical, and probably not worth exploring more yet until I find out how I like the place especially over the winter. It's just fun/exciting to get ahead of oneself.

Based on the income figures you mention, you may need to register for VAT in Malta. However under the principles of EU VAT law, if you are invoicing business customers in the UK (or another EU country), or Non EU customers, there is a good chance you wouldn't have to charge them Maltese VAT. At the same time you may be able to recover the Maltese VAT you incur on purchases for your business. So it might not be a bad thing.

To confirm the full VAT position, more info is required- it depends on the actual service you are providing and your customer's location and status. I'd definitely recommend getting some advice from a local tax advisor who will help you through the specifics, I wouldn't expect it to be too complicated for them or cost you particularly much.

All the best :)

It is absolutely worth it to talk to someone about this, Malta has many tax schemes designed to make it attractive for foreigners to come here and do business here