How Much Tax Is Deducted From Salary In Malta?

If you’re interested in living and working in Malta, it’s important to know how much tax will be deducted from your salary. At MaltaJobs, we can match you with great jobs on an island location that’s bright and sunny all year round.

Fortunately, Malta has one of the lowest costs of living in the European Union, making it relatively easy to get by as long as you can pay your rent. Transportation costs, as well as utilities and groceries, can be purchased for fairly cheap (especially if you opt for local products instead of imported name brands). Rent can be a little on the expensive side due to the stunning views of the Mediterranean Sea, but costs decrease the farther inland you look for a home. Renting an inland apartment may cost as low as 550 euros per month, as opposed to the 1000 or more euros you might spend for a seaside view.

Regardless of whether you live inland or along the coast, Malta is a beautiful place all throughout the year, and because it’s a small island (only 122 square miles), almost everywhere you will need to visit is within walking distance or is a short drive away. If you love island living and the culture and architecture of Europe, you’re sure to love living in Malta (and benefiting from its available tax deductions) too.

Tax Rates

The short answer to the question of how much tax is deducted from your salary in Malta is that income tax ranges between 0% and 35%. Non-residents pay considerably less income tax than residents do.

It’s also worth noting that residents of Malta are protected by a double tax treaty, which prevents a resident’s income from being taxed more than once in two different countries.

Residency

The main factor that determines how your income will be taxed is your residency status in Malta. You must spend at least 183 days per year in Malta to be considered a resident. If you are not a resident and are also not domiciled in Malta, then you will only be taxed on income and capital gains that you receive while in Malta. Foreign capital gains are not subject to income tax even if they are received while you are in Malta.

The tax rates on personal income will be 15% for up to 5 million euros per year. If you make more than 85,000 euros per year, the additional income is tax-free. In order to qualify for this tax incentive, the income must have been earned by business that happened in Malta, or from time that was spent away from Malta but was connected with a business that is located in Malta. Additionally, an employee must:

  • Earn the minimum yearly salary in Malta, which is 75,000 euros.
  • Have at least five years’ of professional experience
  • Disclose all taxable income
  • Not benefit from conflicting tax incentives that are applicable
  • Possess a valid travel document
  • Have a valid health insurance policy
  • Not be domiciled in Malta

Taxes For European Union Nationals In Malta

EU nationals will pay reduced taxes while in Malta. EEA and Swiss nationals may benefit from reduced taxes for ten years, and any third-country national will be able to pay reduced taxes for four years.

Taxes For Non-Residents In Malta

Malta is a beautiful island that thrives on tourism, but tourism alone isn’t enough to sustain it. This means that in recent years (and for the projected future), growth in the business sector has been booming. Unfortunately, a lack of skilled workers in Malta has stunted that growth.

For about a decade, Malta has actively been seeking qualified foreigners to work in skilled jobs in Malta, so the country has designed tax incentives to encourage non-residents to settle on the island. Non-residents will have 0% taxes deducted at the source of their income when it involves dividends, royalties, and interests.

Other Great Reasons To Consider Living And Working In Malta

  • Malta has a rich cultural history. It hosts some of the oldest surviving buildings in the world (the Megalithic Temples) and was once used as an important naval base for the British navy.
  • The hospitality and tourism industry is exploding. Many stunning sights around the island are well cared for and open to the public, and roads have been greatly improved in the last few years to improve internal public transportation.
  • Malta is rapidly growing into a grand technology hub and a home for many young start-up companies.
  • In Malta, you are entitled to public holidays and 24 days off each year, not including two weeks of sick leave per year.
  • As a country, Malta is greatly interested in skilled professionals, especially entry-level employees. Even if you have limited job experience, it’s easy to get started in Malta.
  • There are many expats in Malta, leading to an active and friendly community of expats from all around the world. If you’re an expat, you are sure to meet many new friends both from your home country and from foreign countries too.
  • Malta hosts several international schools where classes are taught in English, so if you are an English-speaking expat, you can enjoy the experience of living in a foreign country and still ensure your children have access to English-speaking classes.
  • All Maltese residents over 18 years of age are entitled to benefits from the social security act, as long as the resident is employed and pays at least 10% of their salary towards social security.

If you’re considering a job in Malta, our salary calculator can help you determine how much you will likely make and therefore how much you will likely be paying in taxes. You may also want to consider our articles on how to make the most of your job search in Malta, Malta’s booming economy, and how to crack remote interviews before you even move there. Those of us at MaltaJobs are excited to help match you with a great employer so you can love living in Malta as much as we do.

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