The Nomad Residence Permits (Income Tax) Rules

The Nomad Residence Permits (Income Tax) Rules have been published on 7 December 2023. Through these rules Third Country nationals who are in possession of a valid nomad residence permit shall qualify for a reduced income tax rate of 10% of their chargeable income derived from “authorised work”.

The term “authorised work” is defined within the legal notice as 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 business, which services, in either case, are provided remotely by means of telecommunications technology as may be approved by Residency Malta Agency.

An eligible main applicant shall not be liable to tax on income derived from authorised work before the end of 12 months from:

(a)  the  date  on  which  the  nomad  residence  permit  is issued, or

(b)  the 1st January 2024, whichever is the later;

unless  he  files  with  Residency  Malta  Agency  a  written declaration  that  his  residence  in  Malta,  even  during  the  said period of 12  months, is not merely of a casual nature.

It is worth noting that:

  1. The  income  referred to above for any given  year  shall be deemed to constitute the first part of the person’s total chargeable income for that year;
  2. Any income arising to the eligible main applicant, other than income derived from authorised work, that is chargeable to tax in Malta,  shall  be subject to standard tax rules;
  3. Any income which is chargeable to tax in Malta derived by any family member of the eligible main applicant who is authorized as such by Residency Malta Agency by being included in the nomad residence  permit  shall  not  be eligible for the reduced rate of tax  but  shall continue to be subject to normal tax rules;
  4. The applicant  shall  be required to be registered for income tax purposes in Malta  and to file an income tax return accordingly.

In order for a third country national to be in a position to apply for a nomad residence permit he must satisfy the following criteria:

1. He must prove they can work remotely, using telecoms.

2. He must prove he falls under any one of the following 3 categories:

  • work for an employer registered in a foreign country and have a contract of work;
  • conduct business activities for a company registered in a foreign country and of which applicant is partner/shareholder; or
  • offer freelance or consulting services, to clients whose permanent establishments are in a foreign country, and with whom the applicant has contracts.

3. He must must have a minimum gross yearly income of €32,400.

4. He must hold a valid travel document; health insurance covering risks in Malta; hold of a valid property rental or purchase agreement; and pass a background verification check.

Persons contracted by a foreign company and giving services to the company’s Maltese subsidiary are not eligible for the Nomad Residence Permit. For more information about the application  for the nomad residence permit please visit the Nomad Residence Permit Website

Should you require any further assistance or require any further information about the reduced rate of tax, do not hesitate to contact us so that we may assist you.

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