From a tax perspective, Malta has the concept of "domicile" and "residence." Typically, residence is decided on a number of days, being 183 days per year. Domicile, on the other hand, is a very different concept, and typically relates to factors such as the place of birth, the place where an individual is raised, the domicile of one's parents and other factors which are more closely linked to an individual rather than simply number of days. It is also important to note that changing one's domicile is not easy and, in most cases, foreign individuals who obtain residence in Malta are not considered to be domiciled. Individuals who are residents in Malta but not domiciled are taxed on the following: income and capital gains arising in Malta; and foreign income that is received in Malta. Any foreign capital is not taxed, even if it is received in Malta.
How many days can you spend in Malta without being considered domiciled?
I am a Chinese businessman who is looking at all three Maltese investment and residency programs. I will be conducting more business in Europe in the next few years and believe that Malta could serve as a part-time base of sorts for me and my family. I know that only Maltese citizens who are deemed to be domiciled are subject to taxation. At what point would one be considered domiciled?
Tax liability is not automatically triggered by acquiring any of the residency programs or by citizenship. It can be triggered if one becomes a tax resident in Malta, and that is a matter assessed on a case-by-case basis.
Attaining Maltese citizenship does not automatically mean that you will acquire a Maltese tax residence or domicile. The citizenship grants a right to reside, but whether you actually become tax resident or not is your choice in the sense that it will depend on whether you factually take up a real and substantive residence in Malta to the extent that you become an ordinary resident here. So residency is a question of fact. Domicile is an issue of intention. In order to attain a Matlese domicile you will need to have cut ties with your current domicile and have the intention to remain in Malta permanently and indefinitely.