Taxes and Tax Schemes in Malta | What You Need to Know in 2025

Malta, a Mediterranean island nation and member of the European Union, has established itself as a significant financial center with an attractive tax system. Located strategically between Europe and North Africa, Malta combines a sophisticated financial services sector with competitive tax policies that draw both individuals and businesses. The country's robust economy is particularly strong in sectors such as financial services, iGaming, and technology.

The expat community in Malta is substantial and diverse, with many drawn to its tax advantages and Mediterranean lifestyle. Key sectors like financial services, iGaming, and technology provide numerous opportunities for foreign professionals seeking tax-efficient employment arrangements. The country's tax system has been carefully designed to attract international talent while maintaining compliance with EU regulations.

Malta's reputation as a tax-efficient jurisdiction continues to grow, particularly among digital nomads and remote workers who can benefit from various tax programs. The country has successfully balanced competitive tax rates with EU compliance requirements, making it an attractive destination for international businesses and professionals.

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Malta Income Tax

Malta employs a progressive tax system for residents, with rates ranging from 0% to 35%. Single individuals are taxed at progressive rates from 0% to 35%. Different tax rates apply to married couples and parents, who generally benefit from more favorable tax bands.

The system includes various deductions and tax credits, including those for children's education, childcare, sports activities, and cultural activities. Resident individuals are taxed on their Malta-source income and foreign-source income remitted to Malta, while foreign source capital gains are exempt even if remitted to Malta.

If you want to have a better understanding of the taxes you should pay on personal income in Malta, you can use the personal tax calculator in the Taxation section of the Malta page.

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Tax Residency in Malta

Malta determines tax residency through physical presence or permanent establishment. Individuals become tax resident if they spend more than 183 days in Malta during a calendar year or maintain their permanent home in Malta. The country offers several special tax statuses for foreign residents that can significantly reduce tax liability.

Non-domiciled residents are only taxed on Malta-source income and foreign income remitted to Malta, with foreign capital gains exempt even if remitted. This creates significant planning opportunities for international professionals and remote workers who can structure their affairs to optimize their tax position.

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Global Residence Programme‍

The Global Residence Programme targets non-EU nationals, offering a flat 15% tax rate on foreign income remitted to Malta, subject to a minimum annual tax payment of €15,000. Participants must:

• Purchase or rent qualifying property
• Hold valid health insurance
• Pass a fit and proper test
• Pay the minimum tax annually

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Highly Qualified Persons Rules‍

The Highly Qualified Persons Rules provide significant tax benefits to foreign professionals in specific industries. Eligible individuals can benefit from a flat 15% tax rate on employment income, subject to minimum salary requirements. The program targets:

• Financial services professionals
• Gaming industry executives
• Aviation specialists
• Technology sector leaders

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Business Taxation in Malta

‍Malta's corporate tax system operates on a full imputation basis, with a standard rate of 35%. However, the effective tax rate can be reduced significantly through Malta's tax refund system. Shareholders can claim refunds of up to 6/7ths of the tax paid by the company, potentially reducing the effective tax rate to 5%.The country maintains an extensive network of double taxation treaties and offers various incentives for businesses, particularly in areas such as research and development, intellectual property, and investment in certain sectors.‍

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Value Added Tax (VAT)‍

Malta's standard VAT rate is 18%, with reduced rates of 7% and 5% applying to specific goods and services. Certain items, including basic foodstuffs and pharmaceutical products, are exempt from VAT. The country offers various VAT incentives for specific industries and activities.‍

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Investment Income Taxation‍

Malta offers favorable treatment for various types of investment income:

• No withholding tax on dividends paid to non-residents
• No tax on capital gains from securities trading for non-residents
• Exemptions available for certain investment income
• Special provisions for investment funds and financial services

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Regional Comparison