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Residency Pages | Tax Relocation | Malta Residency | Taxation of Pension Income

Malta Taxation of Pension Income

1. Low Tax Rate on Remitted Income Only

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. The minimum tax payable to permanent residents stands at 15,000 per annum for the whole family.  No tax is chargeable on foreign source income that is not received in Malta.

This means that, thanks to Malta's 60 double tax treaties, persons who take up residence in Malta can receive their pensions in Malta free of tax at source and subject to a mere 15% income tax in Malta.  Thus by obtaining a Permanent Residence Permit, a foreign national may start enjoying savings of as much as 25% in tax particularly where the pension originates in a state that taxes pension income at 40.  (A list of Malta's Double Tax Treaties can be found here).

If you are considering taking up residence in Malta, you are advised to discuss the matter with us prior to making the move, since, under some double tax treaties, the tax benefits discussed above may not apply to some government pensions, civil service pensions and similar state pensions.

Overseas capital funds invested locally are of course only taxed on any interest or dividends generated thereon, again at a 15% flat rate.

2. A cost-benefit analysis

The qualifications: To qualify for a Global Residence Permit, one must be a non-EU, non-EEA and non-Swiss national.  Dependents including spouse, dependents under 25, financially dependent ascendants and dependent relatives, including domestic staff, are eligible for inclusion in any one Malta residency application.  Applicants must either purchase property in Malta (220,000 to 275,000). [Malta Global Residence programme]

The Costs: The yearly minimum costs of maintaining a Maltese residence permit consists of the required minimum annual property rental of 8,750 - 9,600 and a minimum income tax liability of 15,000.

Cost of Living: The cost of living in Malta is considerably lower than its European counterparts if one avoids shops in tourist zones.  Most international brands have set up shop in Malta so that the Malta provides a good shopping experience at lower or comparable prices.

Residency Pages | Tax Relocation | Malta Residency | Taxation of Pension Income

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