Income tax implications for individuals
Subject to treaty provisions, employment income arising in Malta is subject to income tax in Malta at the following progressive rates:
Rates Chargeable Income From Chargeable Income To wdt_ID Rate Subtract Single Rates
Resident and domiciled individuals
The Income Tax Act defines a ‘resident in Malta’ as being any individual who resides in Malta. Although not clearly defined, the Income Tax Act makes distinctions between ordinarily residence, residence and temporary residence. The distinction is primarily based on the intention to stay in Malta as well as the duration of such stay. Chargeability to tax depends on the residence and domicile of the taxpayer. Domicile is not defined in Maltese legislation. The concept of domicile is a legal concept and generally refers to the place where a person was born, lives and establishes his home and intends to live indefinitely. Maltese law adopts the UK approach to domicile whereby a person previously not connected to Malta who establishes residence here will not be easily deemed to have attained a Maltese domicile. Such a Maltese domicile will only be attained if such an expatriate has, and circumstances show, that he has lost his foreign domicile and intends to indefinitely and permanently establish Malta as his home. Married persons may opt for a joint tax computation or a separate tax computation using either parent rates or single tax rates. No deductions are given against the gross employment income which is brought to charge to tax except for specific deductions such as, a deduction in respect of private school fees, alimony payments, childcare fees, homes for elderly fees and sports fees. Different deduction cappings apply as set in the respective subsidiary legislation.