Income tax in Malta is not based on Maltese citizenship. It is the status of residence and domicile of the individual which would influence taxation and its implementation. A Maltese resident who is not domiciled in Malta is chargeable to tax in Malta only on a source and remittance basis. Therefore, he would be chargeable to tax only on income arising in Malta and on foreign source income if and to the extent that it is remitted/received in Malta. Foreign sourced capital gains are out of scope of taxation, even if it is remitted to Malta.
What are the tax advantageous of the Maltese Golden Visa program?
I am a Chinese citizen that is examining a number of citizenship programs. One of my main concerns in selecting a program is finding a program that provides the best tax benefits as I own a multinational company and have a number of real estate assets. What tax benefits does the Malta program offer?
The MRVP program does not have any special tax benefits. The Maltese tax liability is dependent on such individual’s residency and domicile. An individual who is ordinarily resident and domiciled in Malta, is subject to tax on a worldwide basis. An individual resident but not domiciled in Malta is subject to tax in Malta on: Malta-sourced income and gains and foreign-sourced income which is received in Malta. Foreign-sourced capital gains should not be subject to tax in Malta.
The MRVP does not in itself offer any tax advantages or only any tax consequences. Tax treatment depends on one’s residence and domicile. If a successful MRVP applicant decides to relocate to Malta, he would be taxable on income arising in Malta and foreign-source income remitted to Malta, charged at progressive rates up to 35%, subject to a minimum tax of 5,000 euro. The minimum tax is not chargeable where the foreign-source income of the individual (or the individual and his/her spouse in the case of a married couple) does not exceed 35,000 euros. In such case, the tax would be charged at the ordinary rates. An alternative program with a tax incentive for higher income earners is the Global Residence Program, under which a successful applicant is charged to tax on foreign-source income remitted to Malta at a flat rate of 15%, subject to a minimum tax of 15,000 euro. The GRP also grants a Malta resident permit and visa-free travel within the Schengen Zone. Applicants under the GRP are required not to spend more than 183 days per year in any country other than Malta, without an actual minimum stay requirement in Malta.