Life at Deloitte

Income and taxation

VAT, income tax and government bonuses while living and working in Malta.

Value Added Tax

The standard rate of Value Added Tax is 18% and applies to the purchase most goods and services.

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Income Tax

The rates of tax for an individual are progressive rates with a range of 0% to 35% (see tables opposite). The higher the income, the higher the tax rate. Corporate tax is fixed at 35%. A person who is resident in Malta for more than 183 days a year will be taxed in Malta on his/her income earned in Malta, as well as on any income earned overseas that is received in Malta. The law stipulates that, each month, the employer is obliged to deduct the amount of tax payable on a salary, at source. Certain payments are deductible from the taxable income of an individual that are allowable for tax purposes.

Employers and employees must also make weekly social security contributions which are generally equivalent to 10% of the employee’s salary, up to a maximum of €41.83 per week (if born after 1962); however the actual contribution would depend on the type of employment. The employer must deduct the social security contribution in addition to the income tax deductions.

Malta residents are able to benefit from an extensive double tax treaty network that protects them from being taxed more than once, in different countries, on the same income. In a case where there is no double tax treaty in place, Malta has a system of unilateral relief whereby any taxes paid abroad may be used as a credit towards any income tax due in Malta on that same income.

Malta income tax

Government bonuses

The Government grants an annual cost of living salary increase for all full-time employees. Government bonuses are payable to employees four times yearly as follows:

March

€121.16

June

€135.10

September

€121.16

December

€135.10

 

Tax rates for resident individuals

Rate

Single

Married

Parent

%

0

0 - 9,100

0 - 12,700

0 - 10,500

15

9,100 - 14,500

12,701 - 21,200

10,501 - 15,800

25

14,501 - 19,500

21,201 - 28,700

15,801 - 21,200

29

19,501 - 60,000

28,701 - 60,000

21,201 - 60,000

35

60,001+

60,001+

60,001+

 

Tax rates for non-resident individuals

Rate

Non-resident

%

0

0 - 700

20

701 - 3,100

30

3,101 - 7,800

35

7,801+

 

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