Malta Non-Domiciliary (Non-Dom) Tax Status

|---| | Country | Malta | | Tax basis | Remittance basis (for non-dom individuals) | | Currency | EUR | | Tax year | Calendar year (1 Jan – 31 Dec) | | Primary legislation | Income Tax Act, Cap. 123; Income Tax Management Act, Cap. 372 | | Tax authority | Commissioner for Revenue (CFR) | | Filing | Online via cfr.gov.mt | | Minimum tax | €5,000 per annum flat minimum | | Contributor | Open Accountants | | Verified by | Pending — Malta warranted accountant sign-off required |

---

Section 2 — Who Qualifies as Non-Dom

A person is taxed on the remittance basis in Malta if they are:

1. Resident in Malta (physically present or with habitual place of abode in Malta), AND
2. Not domiciled in Malta (domicile of origin or choice is in another country)

Domicile is a concept of general law, not tax law. It follows:

• Domicile of origin: the country of your father's domicile at your birth
• Domicile of choice: acquired by living in a country indefinitely with intent to remain permanently

Most foreign nationals living in Malta retain their foreign domicile of origin unless they take active steps to acquire a Malta domicile.

Ordinary residence in Malta is established by habitual residence — typically after living in Malta for extended periods. Short visits or a single year's presence may not suffice.

---

Section 3 — Remittance Basis: What Is and Isn't Taxed

Under the remittance basis:

Income/Gain Type	Tax treatment
Malta-sourced income (employment, rental, business in Malta)	Taxed in full at normal rates
Foreign income received in Malta (remitted)	Taxed at normal progressive rates
Foreign income NOT remitted to Malta	NOT taxed in Malta
Foreign capital gains on securities, remitted	NOT taxed (Malta has no CGT on securities)
Foreign capital gains on securities, not remitted	NOT taxed
Foreign capital gains on immovable property, remitted	Subject to Malta tax treatment
Interest/dividends from foreign sources, remitted	Taxed at normal rates
Interest/dividends from foreign sources, not remitted	NOT taxed

Key rule: Income arises in Malta if it is earned from Maltese sources, regardless of where it is received. Foreign income arises outside Malta regardless of where it is received.

---

Section 4 — Remittance: What Counts

A remittance to Malta occurs when foreign income is:

• Physically transferred to a Malta bank account
• Used to acquire property in Malta
• Applied to discharge a liability in Malta (e.g. paying a Malta mortgage)
• Brought into Malta in any form (cash, asset)

Clean capital: Funds that were accumulated BEFORE you became Malta tax resident are NOT remittance of income — they are capital and can be brought to Malta freely without triggering tax. Maintaining separate accounts for pre-residence capital vs post-residence income/gains is strongly recommended.

---

Section 5 — Minimum Tax

Non-dom individuals in Malta are subject to a minimum annual tax of €5,000, regardless of whether they remit any income.

• If the actual tax liability on remitted income exceeds €5,000, normal tax applies
• The €5,000 minimum is a floor, not an additional charge
• Applies per individual (not per household)

---

Section 6 — Capital Gains: The Key Advantage

Malta does NOT levy capital gains tax on:

• Disposal of shares, bonds, units in collective investment schemes, or other securities
• Whether remitted to Malta or not
• Whether the securities are in a Malta company or foreign company

This is one of Malta's most significant tax advantages for investors and business owners realising large gains.

See mt-capital-gains for the full capital gains analysis.

---

Section 7 — Comparison: Non-Dom vs Fully Resident

Scenario	Non-dom resident	Fully domiciled resident
Salary from Malta employer	Taxed at normal rates	Taxed at normal rates
Foreign salary, not remitted	NOT taxed	Taxed on arising basis
Foreign rental income, not remitted	NOT taxed	Taxed on arising basis
Capital gain on foreign shares	NOT taxed	NOT taxed (no Malta CGT on securities)
Dividends from foreign company, not remitted	NOT taxed	Taxed on arising basis
Annual minimum tax	€5,000	N/A

---

Section 8 — Practical Considerations

1. Maintain separate bank accounts: one for pre-residency clean capital, one for foreign income post-residency. Mixing funds creates tracing difficulties.

2. Document the remittance chain: each transfer from a foreign account to Malta should be traceable to capital (not income) where possible.

3. Malta-sourced income is always taxed: if you work for a Malta employer or have Malta rental income, the non-dom status does not help — full Malta rates apply.

4. Exit: when you leave Malta and cease to be ordinarily resident, the remittance basis no longer applies to that year's foreign income from the date of departure (split-year treatment may apply).

5. No official election required: non-dom status applies automatically if the conditions are met — there is no form to file. However, the CFR may request confirmation of domicile status.

---

Section 9 — Sources

• Income Tax Act, Chapter 123, Article 4 — territorial basis of charge
• Commissioner for Revenue: cfr.gov.mt
• Malta Budget 2025: applicable minimum tax rates

Working paper only — not a filed return. Have a qualified Malta warranted accountant review before acting. Non-dom status determination is fact-specific — the analysis above is a research-grade framework.