Tax Residence
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Tax Residence

Last Updated: 17/08/2022

It is very important to understand when an individual is considered as tax resident in a jurisdiction. In Malta, tax residence does not depend on nationality or any other civil status but rather it is a question of fact. A person may be resident in Malta even if he is also resident for tax purposes in another country. In such situations, an individual would be considered as having dual residence for tax purposes, with the latter potentially giving rise to significant tax implications. Those who are considered as ordinary 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 only taxable on a remittance basis. Click on the following link to read more about the remittance basis of taxation for individuals under the Income Tax Act 

When an individual is present in Malta for more than 183 days (in any particular year) they will be considered as tax residence in Malta for that year, regardless of the purpose and the nature of the individual’s stay in Malta. On the other hand, an individual who does come to Malta to establish his residence becomes resident from the date of their arrival, regardless of the duration of their stay in Malta in any particular year. A person who lives in Malta on a permanent or indefinite basis is ordinarily resident in Malta. A person who is in Malta for a temporary purpose may also become ordinarily resident in certain circumstances. This would apply, for example, to individuals who are in Malta for more than 183 days in each year over a long period - say, for three consecutive years. It can also apply to individuals who do not stay in Malta for more than 183 days in any year but who come to Malta regularly over a long period - say, over a period of three years - and establish personal and economic ties with Malta. An ordinary resident may also lose their residence status if they leave Malta permanently or indefinitely. If on the other hand they are temporarily absent from Malta, they will continue to be considered as resident here unless their absence is or becomes inconsistent with a residence status. This depends on the circumstances of each case and on the personal and economic ties that the individual may have retained with Malta. 

If you consider yourself a resident for tax purposes in Malta, or are seeking to apply for tax residence, it is important to ensure that you fulfil all your tax compliance obligations including timely registration and submission of tax returns. Click on the following link to register for tax purposes in Malta.