Income Tax Charge

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Income Tax is intrinsically intertwined to the notion of jurisdiction. Income Tax will arise insofar that Malta can assert a jurisdictional claim on the tax-subject, which jurisdiction is asserted on the grounds of territoriality, ordinary residence, domicile and remittance. The Maltese Commissioner of Inland Revenue may tax:

Unless exempted, all income and capital gains arising in Malta;
Unless exempted, all income and capital gains, wheresoever arising (in Malta or outside Malta) to persons who are both ordinarily resident and domiciled in Malta;
Income arising outside Malta remitted to persons who are ordinarily resident in Malta but not domiciled in Malta; and
Income arising outside Malta remitted to persons who are domiciled in Malta but not ordinarily resident in Malta.

Resident in Malta - In the case of a person who is tax resident (both ordinarily resident and domiciled) in Malta, tax is levied on all income accruing or arising from sources both within and outside Malta, in respect of:-

Trading Income;
Employment Income;
Dividends, Premiums, interest or discounts;
Pension, Charges, Annuities or Annual Payments;
Income, Rents, Royalties, Premiums and other profits derived from Immovable Property; and
Gains or Profits not falling under any of the foregoing

Non-Resident in Malta – In the case of a person who is not tax resident in Malta, (satisfies either but not both the tests of ordinarily resident and domiciled in Malta) tax is levied on the income remitted to Malta or arising from sources in Malta only. Typical examples of taxation arising in Malta chargeable to non-resident would include, but are not limited to:-

Profits or other benefits from a permanent establishment situated in Malta;
Profits or other benefits from any office or employment exercised in Malta (including income from services);
Income, including rent or sale derived from immovable property situated in Malta;
The gross derived by an individual from the exercise in Malta of any profession or vocation, the remuneration of public entertainers, artists and athletes.

For bespoke Income Tax advice, please click here to contact our tax advisors or send us an email on enquiries@fbsmalta.com