The tax liability of individuals depends on their residence, ordinary residence and domicile.
Resident individuals are those who permanently reside in Malta, except for such temporary absences that the Commissioner of Inland Revenue may deem reasonable. In practice, an individual is deemed to be resident in Malta if he/she stays for a minimum of 183days in Malta in one calendar year.
The term ordinary residence is not defined in the Maltese tax law, however, one could say that there are three attributes to ordinary residence; a residence that is taken up voluntarily, a residence that is taken up for a settled purpose and one which forms part of the regular order of one’s life.
An individual is deemed to be domiciled in the country where he/she has his/her permanent home. It is the place the person is mostly connected to and determines the way he/she conducts his/her lifestyle.
Individuals who are both ordinarily resident and domiciled in Malta are taxable in Malta on their worldwide income and certain capital gains. Individuals who are either ordinarily resident or domiciled in Malta, are subject to tax in Malta on income arising in Malta, on certain capital gains arising in Malta and on income arising outside Malta which is received or remitted to Malta. Such persons are not taxable on any capital gains arising outside Malta, whether received in Malta or not.