The tax system in Malta is favourable to say the least. It attracts individuals and businesses alike to transfer their tax residence from a high-tax jurisdiction. Let us have a look at the different type of taxes in Malta.
Taxation of Individuals Income Tax In Malta
Personal income tax is charged at progressive rates of tax up to a maximum of 35 per cent, as illustrated by the following charts:
Stamp duty is paid on acquisition of the property which in general is of 5% of the value of the property. Typically 1% is paid on the preliminary agreement with the remaining 4% being paid on the deed of final sale.
Tax on Capital Gains
No Maltese tax will be due on gains derived from the sale of the individual’s primary residence provided that one would have owned and occupied the property as you main residence for at least three years before date of sale. If the exemption does not apply, tax is due at the rate of 8% on the transfer value. Special rules apply to non-residents selling immovable property in Malta.
Tax on death
No income tax is paid when the property is transmitted to the heirs of the deceased. However stamp duty will be due by the heirs, which in general amounts to 5% of the value of the immovable property. Certain exceptions and exemptions apply
Tax on Donations
No tax is due by the donor when the property is donated to certain relatives as defined by law. Stamp duty will however be due by the person to whom the property was donated
Tax on Rental Income
The possibility of renting property in Malta is available if the property acquired is either situated in a Special Designated Area or has been acquired as a holiday home. Tax will be due in Malta upon any rental income generated; however one has the option to benefit from a rate of income tax of 15%, provided certain conditions are satisfied
Malta does not have any inheritance tax
Malta does not have any wealth tax
Estate and Gift Tax
Malta does not have any estate or gift taxes