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Malta, the picturesque Mediterranean island, offers more than just abundant sunshine, a mild climate, and a rich cultural heritage. It attracts numerous individuals every year who not only seek the Mediterranean lifestyle but also value its tax benefits. In particular, the so-called Non-Dom regime makes Malta one of the most attractive options in Europe for expats and investors. But what exactly is Non-Dom status, and how does it work?

What Is the Non-Dom Status in Malta?

The term “Non-Dom” stands for “not domiciled,” referring to individuals who are not considered tax-resident. This system, also found in countries like the UK and Ireland, allows foreign individuals residing in Malta to exclude income earned abroad from Maltese taxation—provided these earnings are not transferred to Malta.

Benefits of the Non-Dom Program in Malta

Malta's Non-Dom system is one of the most liberal globally, offering numerous advantages:

- No Tax on Foreign Income: Income kept in foreign accounts and not transferred to Malta is tax-exempt.
- Capital Transfers: Wealth accumulated before relocating to Malta can be transferred tax-free.
- No Time Limit: Unlike other countries, Malta imposes no time limit on Non-Dom status.
- No Lump-Sum Tax: Unlike some tax havens, there is no requirement for flat-rate taxation.
- No Wealth, Inheritance, or Gift Taxes: These taxes do not exist in Malta, except for real estate transfers through inheritance or gifting.

Who Qualifies for Non-Dom Status?

Non-Dom status is designed for individuals relocating to Malta while keeping their tax domicile in another country. Eligible categories include:

- Investors: Those with income from dividends, interest, or capital gains.
- Entrepreneurs: Owners of foreign companies (e.g., US LLCs).
- Private Individuals: People with wealth and international income sources. Excluded are incomes derived from Maltese sources, including salaries or profits from local employment or businesses.

Minimum Tax and Requirements

Despite its tax freedoms, some conditions apply:

- Minimum Tax: Those earning over €35,000 in foreign income annually must pay a minimum tax of €5,000 in Malta.
- Remittance Basis Compliance: To remain tax-exempt, earnings must not be transferred to Malta.
- No Economic Ties to Malta: Foreign income must not be linked to Maltese business activities.

Taxes in Malta: An Overview

Taxes may apply to income or wealth generated in Malta or transferred there. Key rates include:

- Income Tax (for Individuals):
- 0%: Up to €12,000.
- 15%: Between €12,001 and €16,000.
- 25%: Between €16,001 and €60,000.
- 35%: Over €60,000.

- Corporate Tax:
- While the nominal rate is 35%, foreign shareholders often benefit from an effective rate of just 5%.

- Capital Gains Tax:
- Non-Dom taxpayers are exempt from capital gains tax on profits not transferred to Malta. However, home country taxes may still apply depending on double taxation agreements (DTAs).

Cryptocurrencies and Taxes

Malta is a haven for cryptocurrency investors:

- Private Gains: Gains from private trading are tax-free (except day trading).
- Commercial Trading: Companies dealing in cryptocurrencies face a 35% tax rate.

Pensions and Retirement Income

The taxation of pensions depends on various factors:

- Source of Pension: Rules vary by country of origin.
- Double Taxation Agreements: For example, German pensions are typically still taxable in Germany.

Why Choose Malta for Non-Dom Status?

Malta combines tax advantages with a high quality of life. With robust infrastructure, political stability, and a thriving economic environment, the island nation is particularly appealing to expatriates. For those seeking to optimize their tax burden while enjoying life in a Mediterranean paradise, Malta provides ideal conditions.

Get Expert Advice Today

Whether you’re looking to optimize your income streams, start a business, or simply enjoy the benefits of the Mediterranean lifestyle, Malta offers a wealth of opportunities. Consult our experts to embark on your journey to the tax haven of Malta.
 

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