Malta Citizenship Taxation

Malta's basis for imposing taxation is based on two connecting factors: domicile and residence.  No Malta Citizenship Taxation is applicable as citizenship on its own does not change the tax status of an individual.  It should be noted that applying for Malta Citizenship by Investment requires the holding of residence status for at least one year leading to the issue of passports to the new Maltese citizens.  With appropriate tax advice, residents of Malta who are not domiciled in Malta will not be subject to tax in Malta, as explained below.

Malta Citizenship Taxation: Tax Residence Status

The typical applicant for Malta Citizenship by Investment is a person who is not domiciled in Malta and who is resident in Malta at least for the first year leading to citizenship.  This requires the payment of tax only on foreign income if this is received, partly or in whole, in Malta  This does not involve any obligation to make an assets or wealth declaration and tax is not due on savings or even capital gains arising out of Malta and received in Malta.

The grant of Maltese citizenship to a non-domiciliary of Malta does not of itself, cause the beneficiary to acquire a new domicile of choice in Malta. Residence for tax purposes is established by demonstrating an intention to reside in Malta indefinitely and definitely on the basis of a day count of 183 days. A citizenship applicant who satisfies the genuine link test is fiscally resident in the first year of residence and potentially in subsequent years, according to the outcome of the pre-immigration tax planning exercise we carry out with clients.

Malta Citizenship Taxation: Tax Treatment of New Citizens

Tax residents of Malta who are not domiciled in Malta are taxable on a remittance basis. Therefore, not taxable on foreign source income not received in Malta, nor on any capital gains arising outside Malta whether remitted or not. Tax is due only on a sources basis on income and capital gains arising in Malta. A non-resident citizen of Malta is only taxable in Malta on Malta source income.

Malta Citizenship Taxation: Property Taxation

After the lapse of the obligatory 5 year holding period, the property in Malta can be sold completely exempt from tax if such property is held for a period of 3 years as the resident's sole and ordinary residence. If sold before the lapse of 3 years, a final property tax of 12% is chargeable on the selling price. 

Malta Citizenship Taxation: No Malta Taxes

Malta has:

  • no inheritance or death taxes.
  • an extensive network of double taxation agreements,
  • no estate duty
  • no net worth or wealth taxes,
  • no municipal taxes, rates or real estate taxes.