Income taxes in Malta for foreign retirement income

You will have to file a return in Malta every year, but its very simple.  You can also just bring your details into the tax office and they will help you fill it out.  The tax returns are done each June so you will have your usa details already worked out.

Social security income from the usa is not taxed in Malta though you must declare it on the annual tax form.

Your private pension will be taxed under the new 5000 euro minimum tax even if you dont bring it into malta.  However any tax you already pay in malta offsets that tax.  For example if you file jointly and your wife pays 4500 euro tax on her maltese income, then you would,only pay 500 more on,your unremitted corporate pension.

Paying taxes in malta will give you access to the maltese social,security benefits such as free healthcare.

timcob wrote:

You will have to file a return in Malta every year, but its very simple.  You can also just bring your details into the tax office and they will help you fill it out.  The tax returns are done each June so you will have your usa details already worked out.

Social security income from the usa is not taxed in Malta though you must declare it on the annual tax form.

Your private pension will be taxed under the new 5000 euro minimum tax even if you dont bring it into malta.  However any tax you already pay in malta offsets that tax.  For example if you file jointly and your wife pays 4500 euro tax on her maltese income, then you would,only pay 500 more on,your unremitted corporate pension.

Paying taxes in malta will give you access to the maltese social,security benefits such as free healthcare.

Paying tax in Malta does not give you access to the Maltese health care system or social security benefits even if you are an EU citizen. You only have access to those if you work (or are self employed) and pay in to the social security system. (NI)
As a retiree I pay tax as required, but it gives me no Social Security Benefits or health cover.

Thanks for that update F0xgl0ve. Just to restate the situation: my EU citizen spouse would be working and paying taxes in Malta and also paying into social security and have coverage through the Malta health care system. Does that entitle me to be covered under her or am I considered a separate health care liability to the country and must pay for my own insurance?

Thanks Foxglove,

I was assuming that Ken would be filing jointly in Malta to get some shelter from the minimum tax and also getting spousal benefits from his wife who is paying social security tax in malta through her maltese paycheck.

I am also an EU retiree and have no entitlement to public healthcare in malta or the eu, since I moved to Malta from outside the EU.

Ken to answer your question.  Once you have met the minimum tax requirements, you can then leave your US pension in America and it won't be taxed in Malta if it is not sent here,but the money is stuck in the usa.  You also have a few other options with the other residency schemes that can limit your taxes between the usa and malta to 15% and allow it to be remitted here.

Thanks Timcob. It appears you may have just answered my last question. I was wanting to confirm that these working spousal benefits included national health care coverage for me. Is that the case?

Also, something you mentioned earlier about my corporate pension and U.S. social security income. I did not know that U.S. Social Security was exempt from taxes in Malta and that it only had to be declared on the tax form. With that said, and what you mentioned about the €5.000 minimum tax on my corporate pension, it seems that it might be more beneficial for us to file our taxes jointly. My pension will only be $790 per month/$9,480 per year, or about €8.400 per year. For the first 18 months of residency, that will be my only income until my U.S. social security begins in early 2024.

Great.  The minimum tax only applies of your global income is over 35k, so if your income plus your wife's income are less than that then you are ok.  Your employer may also allow you to take a lump sum rather than a pension and that would be capital and not taxed by malta if you bring it in.

I found this link and that appears to be the case with respect to U.S. social security pensions being received in Malta. The Double Taxation Relief Treaty between Malta and the US. That's great news for me! I realize that I will pay the taxes on it in the U.S. (and at a VERY low tax rate too) but at least I can bring the funds into Malta without have to pay taxes on it in Malta.

US/Malta Double Taxation Relief Treaty

Our total global income at that point will be less than €35K but only until 2024. After that, my S.S. starts up and my total income alone will then go up to about €37.000 per year