Malta’s approach to the global market has been making a difference for years, thanks to its favourable and competitive tax system that comprises of attractive features such as a full imputation system, refundable tax credit system and a large and expanding international tax treaty network.
The Income Tax Act (“ITA) does not incorporate a definition of the term ‘ordinary resident’. Thus, the derivation of such a concept may be elaborated by looking at the factual circumstances of a person.
A person can be a resident of Malta without being ordinarily resident, however, ordinary residence requires more than mere residence. It connotes residence in a place with some degree of continuity. Most of the principles applied in Maltese fiscal legislation, are construed on the Common Law model, most notably the principles of residence and domicile. Similar, to the UK, Maltese resident-not-domiciled individuals (or “res-non-dom”) are subject to tax on a source and remittance basis.
In the case of income arising outside Malta to a person who is not ordinarily resident in Malta or not domiciled in Malta, the tax shall be payable on the amount received in Malta.
No tax shall be payable on capital gains arising outside Malta to a person who is not ordinarily resident in Malta or not domiciled in Malta.
In other words, a person who is subject to tax in Malta on the basis of source and remittance will be taxed at the resident rates on:
Any income earned in Malta; and
Any foreign income to the extent received in Malta.
Malta will not require disclosure of or impose any tax on:
Foreign source Capital Gains whether received in Malta or otherwise; and
Foreign income which is not received in Malta.
This competitive tax ecosystem is appealing not only to corporations, businesses, entrepreneurs and wealthy individuals who are seeking the best and most suitable tax advise, but also for individuals who already have or are willing to take up tax residence in Malta through a non-investment programme.
How does the 183 Days Rule Work in Malta?
If you happen to spend more than 183 days in Malta during a single year, no matter the reason as to why you are there, you will be considered a tax resident of Malta for that year. If you are thinking of becoming a tax resident of Malta or are already one, it is imperative to comply with all the tax requirements, such as registering and submitting tax returns on time. Our team of tax experts will be more than happy to help you organise your taxes in Malta.
Can you be a tax resident in two countries?
Tax residence in Malta does not depend on nationality or any other civil status — it is a question of fact. A person may be resident in Malta even if they are also resident for tax purposes in another country, giving rise to what is known as dual tax residence, which may in turn have significant tax implications.
It is important to differentiate between being a tax resident in Malta and simply being a resident in Malta. The two do not always coincide, and the tax consequences for an individual depend not only on their residence status but also on whether they are considered domiciled in Malta. Those who are ordinarily resident and domiciled in Malta are subject to tax on a worldwide basis, whilst those who are either not domiciled or not ordinarily resident in Malta are taxable on a remittance basis.
In the case of income arising outside Malta to a person who is not ordinarily resident or not domiciled in Malta, tax is payable only on the amount received in Malta. No tax is payable on capital gains arising outside Malta to such a person, and crucially, this exemption on foreign capital gains applies whether or not those gains are remitted to Malta - a feature that distinguishes Malta from other remittance-basis jurisdictions
Malta Double Taxation Agreement
The Malta Double Taxation Agreement is a treaty that Malta has signed with several other countries in order to avoid double taxation of income and gains. Under this agreement, taxpayers who earn income in one country and are residents of the other can claim relief from double taxation. The agreement typically provides for the exchange of information between the two countries to ensure that both countries' tax laws are respected. Malta has signed these agreements with many countries, including the UK, and the US, among others. These agreements are important for individuals and businesses that operate across borders, as they help to ensure that they are not unfairly taxed on the same income by multiple countries.
Different types of Malta Tax Residency Programmes
Our Team of Tax Advisors will be able to assist you and your family with your personal tax affairs, and especially with the tax-related side of the following programmes that will lead to Non-Investment Residence in Malta:
Key Employee Initiative
‘The Key Employee Initiative’ (KEI) has been introduced by Identity Malta with the aim of facilitating the issuing of single permits, which incorporate the work and residence permits, to highly-specialised third-country nationals who seek employment in Malta.
Highly Skilled Individuals Rule – Tax Planning for High-Income Earners
On 23 January 2026, the Malta Tax & Customs Administration published the Tax Treatment of Highly Skilled Individuals Rules, 2026 by means of Legal Notice 20 of 2026, with effect from 1 January 2026. These Rules replace several existing programmes, including the Highly Qualified Persons Rules, the Qualifying Employment in Innovation and Creativity Rules, the Qualifying Employment in Aviation Rules, the Qualifying Employment in Maritime Activities Rules, and the Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules, consolidating them into a single, harmonised framework.
The Rules introduce a flat income tax rate of 15% on qualifying employment income for eligible expatriates employed in recognised roles across a broad range of sectors, subject to conditions. Sectors covered include financial services and insurance, gaming, aviation and maritime, and STEM and technology, among others.
Key conditions for eligibility include:
A minimum annual employment income of €65,000, exclusive of fringe benefits, with this threshold scheduled to increase by €10,000 every five years.
Possession of relevant professional qualifications or a minimum of five years of comparable professional experience, and employment in Malta under a qualifying contract in an eligible office.
Having sufficient stable resources, living in suitable accommodation in Malta, holding valid travel documents, maintaining private medical insurance covering the beneficiary and their family, and not being domiciled in Malta.
The 15% tax rate applies to employment income from eligible roles up to €7,000,000 per year, with income in excess of €7,000,000 chargeable at the standard rate of 35%. The benefit applies for an initial period of five years, with the option of two further extensions of five years each, subject to conditions. The benefit shall not apply beyond 31 December 2040.
Applications are open for a ten-year period from 1 January 2026 to 31 December 2035.
CSB Group's tax team can assist both employers and employees in assessing eligibility under the Highly Skilled Individuals Rules, navigating the application process, and ensuring ongoing compliance with all applicable requirements.
By virtue of the inclusion of the Subsidiary Legislation 123.134 to the Maltese Income Tax Act, a special tax status has been issued for retirees from EU, EEA countries and Switzerland when remitting their pension into Malta.
A person is an ordinary resident in a country by taking into account the duration of the individual’s presence in the country, frequency, regularity and nature of visits to the country, as well as business and family ties.
EU and Non-EU members can apply for Ordinary residence in Malta, albeit they are subject to different requirements.
This taxation scheme was mainly devised to attract to Malta individuals working within knowledge-based industries such as iGaming, engineering, technology and product development in order to address the skills gap present in Malta’s labour market.
Under the Qualifying Employment in Innovation and Creativity (Personal Tax) Rules (the “Rules”), expatriates holding an eligible office under a qualifying contract of employment directly engaged in carrying out of duties or management of research, development, design, analytical or innovation activities, may opt to benefit from a reduced flat rate of tax of 15% on their employment income derived in respect of work or duties carried out in Malta.
Please note that the Qualifying Employment in Innovation and Creativity (Personal Tax) Rules are no longer accepting new applications. As from 1 January 2026, this programme has been replaced and consolidated into the new Highly Skilled Individuals Rules. Individuals who were already approved under this scheme may continue to benefit for the remainder of their approved qualifying period, subject to the original conditions of their approval.
