Are you considering moving to Malta ?
Removals to Malta could make your fantasy come true if you have dreamt of life on an idyllic island. Malta will indeed allow you to enjoy a sunny climate while keeping all of the luxuries of modern life. However, if you are moving to Malta there is a lot you’ll need to research before you set off, such as the transport available on the island and whether you’ll need to learn the language. We’ve done some of the hard work for you with this guide which covers the essential info that every expat considering relocating to Malta should know.
Malta is the smallest state within the EU, with a population of just 400,000 stretched over 316 square kilometres. The country is actually an archipelago which is comprised of three islands: Malta, Gozo and Comino.
Malta is the biggest of the three islands and has the most sites of interest as well as being the administrative and commercial hub. Gozo is quieter with more rural areas, as it is primarily utilised for fishing, agriculture, tourism and crafts. The last of the three, Comino only has one hotel on the island and is considered to be uninhabited.This trio of islands is set in the middle of the Mediterranean, south of Sicily and north of Africa. This brings a hot and sunny climate with many hours of sunshine each day. Winters are short and mild with only occasional bursts of cold weather.
After joining the EU, Malta went on to adopt the euro in 2008 and this is now the only legal tender currency in the country.
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As part of the EU, the rules about living and working on this tiny island are pretty straightforward. EU citizens can live or work in Malta without having to apply for any kind of visa or work permit. However, if they plan on staying for longer than three months they must apply for the formal registration certificate.
Non-EU nationals will have to secure approval from the Department of Citizenship and Expatriate Affairs to work in Malta. There are a number of requirements attached to this type of application including supporting evidence from the employer. This visa can be renewed up to a maximum of three years although may possibly be extended in exceptional circumstances.
If you are an EU citizen, living in Switzerland or if you live in an EEA member country then you don’t need to apply for an employment license (unless you live in Croatia) but it is advisable to contact EURES to see if there any additional requirements before you work in Malta.
As the archipelago of Malta covers such a small space, transport in and around the islands is very easy.
Driving offers real freedom to visit wherever you want and allows you access to the furthest stretches of the island. In Malta, cars drive on the left-hand side of the road, just like the UK. Likewise, the signs are all in English.
The buses make a good alternative to driving and are a reliable, safe and clean form of public transport. Typically operating between 5 am and 11 pm, there are 80 routes around the Maltese islands. There are even buses that travel between Malta and Gozo. The buses are modern with air conditioning, and all feature low rise entry and wide doorways to accommodate disabled passengers. You can get a Tallinja card that you can top up online.
There aren’t any proper railways on Malta. Of course, there are tourist trains which are trackless and offer a fun way to see the sights.
White taxis are another quick way to get around but aren’t the cheapest option. They can pick passengers up from anywhere other than bus stops; Make sure you remember to check the fare before setting off.
Malta offers an excellent standard of healthcare; They rank fifth globally in the World Health Organisation’s chart. This outstrips larger countries such as the UK and US by a long way and demonstrates the quality which is available within the state system.
Any emergency medical treatment is free of charge to everyone, regardless of whether they have insurance coverage. Once they are stable, they will need proof of cover for further treatment.
the terms of their EHIC card cover EU citizens arriving for a short-term visit only. The card provides access to free treatment for emergency and necessary medical treatments; it is not a proper replacement for travel insurance.
For those EU nationals who are staying within Malta for longer, they will need to register to qualify for state insurance. This is funded through salary contributions which are roughly equivalent to 10%. Self-employed people can opt to make contributions to also benefit from the state cover available.
As a small island, Malta organises its referrals and treatment geographically, a system which helps to cut back on waiting times. However, there still may be delays for treatment, just like any state health system. Individuals who are keen to avoid waiting a long time for routine referrals can opt for private healthcare instead. This is more expensive but provides better options and shorter waiting times so it’s often a preference for expats.
Non-EU nationals will not be able to take advantage of the state healthcare and will need to take out either travel insurance or private healthcare which offers cover while overseas.
What do you need to know about finance and tax in Malta and more specifically, how does it apply to you as a foreign resident?
Long occupied by the British, the main language in Malta is English.
It has long been a draw for expats due to its laid back lifestyle and quality of life.
One of the other benefits for many is the low tax rates and the fact that there are no wealth, inheritance of gift taxes. The finance and tax in Malta rates are significantly lower than in other countries.
When you put all of these benefits together along with the Mediterranean climate, it is no surprise that many expats, especially those from the EU, enjoy their retirement here.
If you are considering a relocation to the beautiful island of Malta what can you expect? How will the regulations surrounding finance and tax in Malta apply to you and your circumstances?
Let’s take a look at the main personal taxes and contributions and what they mean:
Tax obligations when moving to a new country
First and foremost it is important to check what taxes you are required to pay in Malta.
Obviously, they will meet the usual income tax requirements that you get in most countries. Then there is social security.
If you want the benefits of the social insurance scheme, then you need to understand this.
Besides this what other taxes are there and how will they affect you?
If you are moving as part of your retirement and aren’t planning on working, then there is much less to consider.
If you are going to be employed, then you will need to understand the income tax rates and how they affect you.
Of course, we only offer a guide so you may want to consult a good accountant.
The good thing about Malta is that the main language is English so finding an accountant that you can converse with shouldn’t be a problem. Once you have established your requirements, you can start to tie up the loose ends at home.
If you are moving partway through the tax year, do you need to file a tax return?
If you are self-employed or have to self-assess, then you need to ensure this is done. You also need to inform the tax department of your relocation. Perhaps you need to leave a forwarding address to ensure you receive vital communications? Then when you arrive in your new home, you will need to declare your arrival.
An employer will need to inform the tax office that you work for them and make the relevant contributions.
Income tax rates in Malta
The income tax rate in Malta is progressive and ranges from 0 – 35%. Up to EUR 9,100 of earnings are tax-free. Beyond that, the rates range from 15% on earnings up to EUR 14,500 to 35% on earnings over EUR 60,001.
When you consider income tax rates around the world, this rate is very favourable.
These are the rates for single people however they do depend on your personal circumstances. For married couples and parents, the rates vary. Foreign residents are only subject to income tax on their Maltese attributed income – not their worldwide income. This alone makes it an attractive prospect to many.
Make sure that the tax office knows of your existence. While it is the employer’s job to notify the tax department of your employment, it is worth double-checking.
If you are self-employed, then you will need to register to self-assess.
Social security contributions in Malta
Everyone over the age of 16 and 65 or under are required to pay social security contributions whether employed or self-employed.
If an employee works for less than 8 hours a calendar week, then they are exempt from payments.
The employed and their employer are required to pay Class 1 contributions whilst the self-occupied and self-employed are required to make Class 2 contributions.
The benefits offered by the Malta social insurance scheme include the benefits offered by most other countries. These include maternity pay, unemployment benefit, child allowance and sickness benefit.
Corporate tax in Malta
If a company is registered under the laws of Malta and considered a resident company, the corporate tax rate is 35%.
There is a scheme in which shareholders can claim back a refund of a portion of the tax. If this applies to your business, then you will need to investigate it further and how it affects you.
If you are a non-resident business operating in Malta, then you are subject to any income received in Malta and through a Maltese bank account.
VAT in Malta
The VAT rate in Malta is 18%. There are, as with most countries, reduced rates which apply to certain goods and services. These reduced rates are set at 7% and 5%.
While many countries have been raising their thresholds to help start-up businesses, Malta has actually reduced theirs. What once was a VAT threshold of EUR 14,500 is now NIL. What this means is that every business is subject to VAT and has to submit a VAT return in accordance with the regulations of finance and tax in Malta.
Other Maltese taxes
In addition to the usual income tax, VAT and corporate taxes, there are other taxes to consider in Malta. There is, however, no inheritance tax, gift tax or wealth tax in Malta.
There are capital gains taxes and stamp duties as well as the usual excise duties.
The draw of the country is the simple tax regime and the fact that personal taxes are more inviting than other countries.
With a lower end income tax rate of 15% and the fact that individuals are only taxed on Maltese earnings, it is a popular destination for many expats.
For more information on how you will be personally affected by a move to Malta and get a better understanding of the finance and tax in Malta, it is advisable to seek the help of an expert.