PERMANENT RESIDENCE SCHEME
Fiscal & Other Benefits of Maltese Residence
1. An low tax rate: no worldwide taxation
2. Exemption from Customs Duty/VAT
3. Freedom of movement: no requirement to live in Malta
1. An unusually low tax rate: No "worldwide" taxation of income
A flat rate of 15% is chargeable only on income (less personal allowances) received in, or remitted to, Malta from either local or foreign sources. This is subject to a minimum payment of Lm1,800 per annum (approx. Eur4300 / £2,900 / US$4,700).
Overseas capital funds invested locally are of course only taxed on any interest or dividends generated thereon, again at a 15% flat rate.
Maltese permanent residence provides a legal tax residence in a European jurisdiction which has around 30 double tax treaties with other countries [Malta's Double Tax Treaty Network]. Once the permit is issued and the permit holder has registered with the Inland Revenue Department in Malta, the Maltese tax authorities will certify that for Maltese taxation purposes, the permit holder is resident in Malta.
2.
Exemption from Customs Duty/VAT
Your used household and personal effects, furniture and other domestic articles (excluding firearms and weapons of all kinds) may be imported free of import duty if imported within six months of your arrival in Malta to take up residence. In such cases import licences are not required.
A maximum of one private motor-vehicle may be imported per person (husband and wife counting as one) free of Value Added Tax (Item 12, Fifth Schedule to the VAT Act, 1998) and free of customs duty (Second Schedule to the Import Duties Act), subject to such person satisfying the Comptroller of Customs that:
(i) he is in possession of a permit of residence issued to him by the Government in terms of section 7(1) of the Immigration Act, 1970; and
(ii) the motor-vehicle has been in his ownership for a continuous period of at least six months immediately before the issue of the residence permit, provided that customs charges and/or fiscal charges to which such vehicle is normally liable have been paid either in the country of origin or in the country of departure and subject to the motor-vehicle being imported within six months of the date of the said permit or of such person’s arrival in Malta to take up residence, whichever date is the later. Provided that where any motor-vehicle imported as aforesaid free of duty is sold or disposed of by such person for use in Malta, such motor-vehicle shall be deemed to be taken out of bond at the time of such sale or disposal and duty shall be payable thereon by the person who becomes the owner thereof in accordance with the provisions of section 4 of this Act.
(c) ‘At time of disposal the vehicle’s value is assessed by Customs. Motor-vehicles of EU origin are subject to payment of 15% VAT on the assessed value, while those of Non-EU origin pay 12% duty on the assessed value and 15% VAT on the total of the assessed value and duty due.’
Further information may be obtained from the Comptroller of Customs (Tel: 235721-9)
3. Complete Freedom of Movement
There are no annual minimum stay requirements. A permanent residence may travel to and from Malta freely without the need of applying for a visa or extensions of stay.
Permanent Residents are allowed to register their imported vehicle at the following rates (Second Schedule, Motor Vehicles Registration Tax Act, 1994):
Vehicles with engine:
(a) of a cylinder capacity not exceeding 1500cc – 11%
(b) of a cylinder capacity not exceeding 1500cc – 16.5%
The First Schedule rates of the said Act (applicable when the imported vehicle is sold or disposed of for use in Malta) read as follows:
Vehicles with engine:
(a) of a cylinder capacity not exceeding 1300cc-50.0%
(b) of a cylinder capacity exceeding 1300cc but not exceeding 1500cc – 53%
(c) of a cylinder capacity exceeding 1500cc but not exceeding 1800cc – 60%
(d) of a cylinder capacity exceeding 1800cc but not exceeding 2000cc – 65%
(e) of a cylinder capacity exceeding 2000cc – 75%
15% VAT is applicable on the amount of Registration Tax payable.
Further information may be obtained from:
The Licensing and Testing Department –
Tel: 247955-57, 231682
5. Repatriation of
your capital and income
Proceeds from the sale of property, encashment of investments, local income and excess income brought into Malta may be freely repatriated by permanent residents, provided that any tax due has been settled.
Owners of properties with swimming pools or properties enjoying the use of swimming pools are allowed to rent them out, provided that such properties are licensed as holiday accommodation by the Hotels and Catering Establishments Board. All income thereon, is of course, subject to the 15% tax rate mention in (1) above and may be repatriated as in (5) above.
7. No death duties are
payable in Malta
No death duties are payable in Malta.
Transfer duty (according to the Duty of Documents and Transfers Act, 1993) is charged at 5% on:
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immovable property in Malta.
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any shares in a locally registered company (excluding those companies listed on the stock exchange).
Conditions for granting a Residence Permit
