Capital Gains Tax in Malta

Capital Gains Tax in Malta

Updated on Wednesday 04th November 2020

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Capital gains tax in Malta.jpgThe capital gains tax applies to real estate properties, stocks, bonds, jewelry, and other assets. Such a tax is paid only on realized gains after the sale of the assets. There are some important facts to consider about the capital gains tax in Malta. Our Maltese lawyers are here to provide legal advice and assistance for those wanting to register for taxation in Malta.

Capital gains for transfer of assets in Malta

The Maltese legistration clearly specifies the types of assets for which the capital gains tax is imposed. In most cases, intellectual property and securities are subject to the capital gains tax in Malta, plus related instruments. Such gains are usually included in the taxable income of the company or individual in the calculation of the tax rate. It is worth stating that the capital gains arising outside of Malta are only taxable in Malta if they accumulate to taxpayers who are residents and domiciliated in this country. We can assist foreigners to register for taxation in Malta. Besides that, starting a business in Malta enters the attention of our lawyers in Malta, so feel free to discuss it with us at any time.

What you need to know about property transfer in Malta

The transfer of immovable property in Malta is subject to the Property Transfer Tax or PTT instead of capital gains tax. In other words, the PTT is the cost of the transaction and not a tax imposed on the element of gain. The tax is set at 8% of the selling price or transfer value, yet there are a few exceptions for properties acquired before 2004. Also, if the property is sold within 5 years from the acquisition, the PTT is set at 5%.

Is there an income tax for foreign-sourced capital gains in Malta?

The foreign-sourced capital gains are not subject to the income tax in Malta, even if remitted to a Maltese bank account. As an example, there is no income tax imposed on capital gains for selling or buying shares on foreign stock markets, according to the Maltese tax legislation. This is a huge tax advantage for foreigners in Malta. Also, there is no wealth tax, no gift tax, and no inheritance tax imposed in Malta, other great tax benefits. It is a known fact that Malta has a relaxed tax regime compared to other European countries, and this is why many foreign entrepreneurs decide on doing different types of businesses in the insular state. If you need advice and legal support, please discuss it with our lawyers in Malta.

The HNWI residence scheme in Malta

The High Net Worth Individual residence scheme is a programme meant to attract foreign investors in Malta who can benefit from a series of tax advantages and many more. The foreign-sourced income remitted to a bank account in Malta is subject to a flat rate of 15% for HNWI permit holders. The foreign-sourced capital gains remitted in Malta or not are not subject to taxation. However, HNWI permit holders must observe the annual tax that ranges between EUR 20,000 and EUR 25,000. In the case of foreigners with a residence permit in Malta, there is no income tax imposed on any kind of foreign-sourced capital gains remitted in Malta or elsewhere. If you need legal guidance for starting a company in Malta, do not hesitate to talk to our attorneys in Malta. We can handle all the business registration formalities in Malta.

Making investments in Malta

Malta is a great business destination for all foreigners interested in a solid and reliable business climate that provides a series of advantages. The tax structure is extremely appealing and relaxed, plus, it presents a series of benefits, among which, no capital gains tax for selling or buying shares on foreign stock markets. Besides the attractive tax regime, Malta offers a skilled workforce and foreign investors can rely on the well-educated labor force and qualified workers available. Sectors like tourism, real estate, communications, financial and insurance sectors, gaming, and pharmaceuticals are among the ones that receive a large amount of foreign direct investments. Here are some facts and figures that show the economy and business direction of Malta:
  • Approximately USD 206 billion was the total FDI stock registered in Malta in 2019.
  • About 97% of the total FDI stock is directed to the financial and insurance activities in Malta.
  • More than 31,000 companies with activities in Malta have foreign stockholders.
Entrepreneurs interested in more details about the capital gains tax in Malta are invited to contact our law firm in Malta. We are here to provide immediate legal advice and assistance.