Malta imposes taxes on individuals depending on their residence, domicile, and source of income. If someone is both ordinarily resident and domiciled in Malta, they are taxed on all their income and capital gains, whether from Malta or elsewhere. On the other hand, individuals who are residents but not domiciled in Malta are taxed on their income and capital gains arising from Malta, as well as on any foreign income remitted to Malta. This means that foreign capital gains received in Malta would not be subject to tax, even if received or remitted to Malta. If someone is neither a resident nor domiciled in Malta, they are only taxed on income arising in Malta.

Both residents and domiciled individuals, as well as residents but not domiciled individuals, face progressive tax rates ranging from 0% to a maximum of 35%.

Part-time Employment and Self-Employment

Individuals earning income from part-time work may be eligible for a reduced tax rate of 10%, provided they meet specific conditions. The income subject to the 10% tax rate is capped at €10,000 per year for part-time employment and €12,000 per year for part-time self-employment. Any income exceeding these capped amounts will be added to the individual’s other sources of income and taxed at the progressive rates. Taxpayers can choose not to opt for this final withholding tax, in which case, the tax on such income will be calculated based on the progressive rates.

Tax for Resident non-Domiciled Individuals

Individuals who are residents but not domiciled in Malta and receive foreign-source income exceeding €35,000, which remains unremitted to Malta, will be subject to a minimum annual tax liability of €5,000, unless they qualify for a specific tax scheme.

In cases where the income chargeable to tax in Malta, before factoring in any relief, is less than the prescribed minimum tax, the taxpayer will be deemed to have acquired additional income in Malta from sources outside the country. This measure ensures that the total tax liability on the entirety of their income amounts to the minimum tax of €5,000.