Maltese Tax Laws and Regulations

Maltese Tax Laws

Dealing with tax, payroll, and employment regulations for your staff from overseas is always a tricky process and poses complications that demand expert guidance. Malta is no exception with a multi-layered system applying to personal income tax rates.

Overview of Taxes in Malta

• Personal tax rates 2021:
  Single rates:
  – (Tax-free allowance of €9,100)
  – Four rates from €9,101 (US$10,420) to €60,001 (US$68,702) and over – 15% to 35%
  
  Married tax rates 2021:
  – (Tax-free allowance of €12,700)
  – Four rates from €12,700 (US$14,541) to €60,001 (US$68,702) and over – 15% to 35%
  
  Parent tax rates 2021:
  – (Tax free allowance of €10,500)
  – Four rates from €10,501 (US$12,022) to €60,001 (US$68,702) and over – 15% to 35%
  
  Non-resident tax rates for 2021:
  – (Tax-free allowance of €700)
  – Three rates from €701 (US$801) to €7,801 (US$8,932) and over – 20% to 35%
  
• Social Insurance Taxes:
  – Employer and employee contributions from employees’ salary – 10%
  – Self-occupied and self-employed from the previous year’s net profit – 15%
  
• Corporate Income Tax (CIT): Standard rate – 35%
• Value Added Tax (VAT): Standard rate – 18%
• Other taxes: Malta has no capital gains tax. Income tax is imposed on any gain made from shares, securities, intellectual property, partnerships, or trusts. Malta imposes no taxes on inheritances, estates, or gifts, though stamp duty may apply in some cases.

Malta Individual Tax – Single, Married

Individuals living in Malta for more than 183 days a year are taxed on their income earned in Malta and worldwide income that is received in Malta, but not taxed on income earned abroad that is not paid into Malta. Individuals married to a person who is resident and domiciled in Malta are liable for taxation on their worldwide income. Non-residents are taxed only on income and capital gains received in Malta.

Married couples or those with an authorized civil partnership have a joint obligation to file returns and decide which is to be the registered taxpayer, with the decision being effective for five years. The couple’s registered taxpayer can still elect to have their partner taxed separately; in which case they are taxed at single payer’s rates.

Single personal tax rates for 2021

• A tax-free allowance of €9,101
• €9,101 (US$10,420) – €14,500 (US$16,602) – 15%
• €14,501 – €19,500 (US$22,328) – 25%
• €19,501 – €60,000 (US$68,701) – 25%
• €60,001 and over – 35%

Married rates 2021

• A tax-free allowance of €12,700
• €12,701 (US$14,543) – €21,200 (US$24,274) – 15%
• €21,201 – €28,700 (US$32,862) – 25%
• €28,701 – €60,000 (US$68,701) – 25%
• €60,001 and over – 35%

Parent rates 2021

• A tax-free allowance of €10,500
• €10,501 (US$12,023) – €15,800 (US$18,091) – 15%
• €15,801 – €21,200 (US$24,274) – 25%
• €21,201 – €60,000 (US$68,701) – 25%
• €60,001 and over – 35%

Non-resident rates 2021

• A tax-free allowance of €700
• €701 (US$802) – €3,100 (US$3,549) – 20%
• €3,101 – €7,800 (US$8,931) – 30%
• €7,801 and over – 35%

Employee Social Insurance Taxes

• Employee contributions remitted from salary – 10%
• Self-occupied and self-employed from the previous year’s net profit – 15%