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Tax Guide Malta

In Malta, personal income taxation is levied on the worldwide income of all individuals that are ordinarily residents, and domiciled in Malta.

On the other hand, individuals that are ordinarily residents, but are not domiciled in Malta are taxed only on the income that has been derived from within Malta. Additionally, they are also taxed on any income that is received in Malta as a remittance from abroad. However, they are not taxed on their global earnings, if they are not received in Malta. Similarly, they are also not taxed in Malta on the foreign capital gains. This is irrespective of this amount being remitted in Malta, or not.

In the same manner, individuals that are married to a resident in Malta (both, ordinarily resident and domiciled) are supposed to be taxed on their worldwide income.

Lastly, for non-residents in Malta, they are taxed on the income that is earned within Malta during their stay.

Personal Income Tax Rates

Personal Income Tax is levied on income at progressive rates.

As far as single taxpayers are concerned, they are incur a tax liability of EUR 12,275 on the first income slab of EUR 60,000. On the other hand, married taxpayers are supposed to be liable to pay EUR 11,095 tax on the first income slab of EUR 60,000. In the case where amounts exceed these thresholds, the applicable tax rate is 35% for both single and married individuals.

 The rate of tax that is levied ranges from 0% to 35%. The following tax rates are applicable for single taxpayers for the tax year 2021:

  • For an income between 0 EUR and 9100 EUR: A tax rate of 0% is applicable.
  • For an income between 9101 EUR and 14,500 EUR: A tax rate of 15% is applicable.
  • For an income between 14,501 EUR and 19,500 EUR: A tax rate of 25% is applicable. This is subject to a deduction of EUR 2815.
  • For an income between 19,501 EUR and 60,000 EUR: A tax rate of 25% is applicable. This is subject to a deduction of EUR 2725.
  • For an income over and above EUR 60,001: A tax rate of 35% is applicable. This is also subject to a deduction of EUR 8725.

In the same manner, for married resident taxpayers, the following rates are applicable:

  • For an income between 0 EUR and 12,700 EUR: A tax rate of 0% is applicable.
  • For an income between 12,701 EUR and 21,200 EUR: A tax rate of 15% is applicable.
  • For an income between 21,201 EUR and 28,700 EUR: A tax rate of 25% is applicable. This is subject to a deduction of EUR 4025.
  • For an income between 28,701 EUR and 60,000 EUR: A tax rate of 25% is applicable. This is subject to a deduction of EUR 3905.
  • For an income over and above EUR 60,001: A tax rate of 35% is applicable. This is also subject to a deduction of EUR 9905.

There are separate rates present too, for parent taxpayers. These rates can be claimed by individuals that maintain custody of the child, or have a child to raise. The following tax rates are applicable in the case of parents:

  • For an income between 0 EUR and 10500 EUR: A tax rate of 0% is applicable.
  • For an income between 10,501 EUR and 15,800 EUR: A tax rate of 15% is applicable.
  • For an income between 15,801 EUR and 21,200 EUR: A tax rate of 25% is applicable. This is subject to a deduction of EUR 3155.
  • For an income between 21,201 EUR and 60,000 EUR: A tax rate of 25% is applicable. This is subject to a deduction of EUR 3050.
  • For an income over and above EUR 60,001: A tax rate of 35% is applicable. This is also subject to a deduction of EUR 9050.

Additionally, there is a minimum tax imposed in Malta, equivalent to a sum of 5000 EUR. This applies to individuals that are ordinarily residents, but not domiciled in Malta. These individuals have to bear this tax in the case where they are not subject to any other minimum tax threshold. This is also referred to as the minimum tax liability.

Corporate Income Taxation in Malta

Companies that have been incorporated in Malta are considered to be both resident as well as domiciled companies. They are subject to Corporate Income Taxation on basis of the worldwide income. On the other hand, for companies that have not been incorporated in Malta are subject to tax on income that has been earned in Malta. Additionally, all income that is remitted into Malta is also used for tax related purposes.

The Corporate Income Tax rate that is applicable across all companies is 35%. This is a flat rate.

There are several other corporate income taxes that are in place too. For example, all petroleum taxes are subject to tax rate of 50%.

Other Corporate Taxes in Malta

Value Added Tax (VAT): There is a consumption tax in place, in the form of VAT (Value Added Tax). The rate of VAT is mostly 18%. However, there is a reduced rate that is applicable on certain goods and services, which essentially constitute as necessity based items. However, there are also exemptions in place. For example, exports of goods to other countries outside the European Union are exempted from filing VAT.

Customs Duties: Goods that are imported from outside the European Union are also subject to custom duties.

Excise Duties: Excise Duties are also levied on a number of energy products, including alcohol, and tobacco related products.

Social Security Contributions: Employers are also required to bear social security contributions at a fixed rate of 10% of the individual employee’s salary.

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