New regulations have been recently implemented for digital nomads residing in Malta, as well as prospective digital nomads. Individuals holding a valid nomad residence permit issued by Residency Malta Agency will now be subject to an income tax rate of 10% on earnings arising from “authorized work.” This marks a significant reduction from Malta’s progressive income tax rates, which may be as high as 35%.
What is Authorised Work?
Authorised work is defined as either;
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- Services provided by an eligible main applicant in accordance with a contract of employment with an employer who is not resident in Malta and who does not carry on business in Malta through a fixed place of business; or,
- Services performed by an eligible main applicant in a self-employed capacity for clients who do not reside in Malta and who do not carry on business in Malta through a fixed place of
In either case, services by digital nomads must be provided remotely by means of telecommunications technology as may be approved by Residency Malta Agency.
Exemption Period
Eligible main applicants are provided with a 12-month duration during which they are not obliged to pay income tax in Malta on income derived from authorized work. This exemption commences either from the issuance date of the nomad residence permit or from the 1st of January 2024, whichever is the later.
Simply put, for this initial twelve-month period, thee eligible main applicant is exempt from income tax liability on earnings generated from authorised work. This provision offers a significant advantage for digital nomads establishing their base in Malta, allowing them to kickstart their professional activities without immediate tax implications.
This exemption is not available to persons who are not in possession of a valid nomad visa (such as for example in cases when the visa has expired), but who were granted a nomad visa within the last two years from the date of when they ceased to hold the original nomad visa.
Tax Registration Requirements
An eligible main applicant having income chargeable to tax in Malta shall be required to be registered for income tax purposes and to file a return of income accordingly.
Double Taxation Relief
The eligible main applicant will also be able to benefit from the double taxation relief as per Malta’s tax treaties as well through other relief provisions in terms of the Income Tax Act.
How can we help?
SMM Group stands ready to assist both current Nomad Resident Permit holders and potential applicants in adhering to the recently implemented regulations.
For personalized assistance or consultations, get in touch by filling in our contact form or call +356 2123 7167 for immediate assistance.