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British Pensioners in Malta/Gozo

tax on pensions for permanent residents

Many of our members are pensioners, so here's a place to discuss the relevant issues.

Postby gozomark » Tue 17 Oct 2006 05:24 GMT

as for our monthly budget, I was very reluctant to give an overall figure as it means so little without context - Euro 2,300 might be astronomical to you (and to many living in Malta), and yet to some be very little. Better to focus on individual prices I think, so post any items you want the prices of
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Postby gozomark » Tue 17 Oct 2006 05:27 GMT

oh yes, does the advisor expect the change to be good or bad ??
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Postby gozomark » Tue 17 Oct 2006 05:36 GMT

bit of info on our budget - of the Lm 1,000/month - these are very rounded !

Lm 150 supermarket
Lm 100 eating out
Lm 100 alcohol
Lm 100 utililtes
Lm 100 car (incl fuel, repairs, insurance, depreciation)
Lm 50 communications - internet, phones, cable
Lm 50 hobbies
Lm 100 emergencies/ replacing things that break
Lm 50 clothes
Lm 50 going out - cinema, theatre etc etc
Lm 150 evereything else !
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income becoming capital after 31/12

Postby raph » Thu 19 Oct 2006 15:30 GMT

I re-read the postings on the above and am still not clear.
My pension is totting up in an account in Spain. So if I leave it be until say next June, would that constitute capital as opposed to pension?

Are there other countries with similar tax laws?!
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Postby gozomark » Thu 19 Oct 2006 15:40 GMT

your 2006 pension will be counted as capital if brought into Malta in 2007, but your 2007 pension would be income, so....

its important that you seggregate your pension income - if say you get your pension monthly and in June 2007 you bring the money into Malta, then if your account in Spain has pension from 2007 and 2006 in it, the Maltese tax authorities may say the 2007 pension money was brought in first, so on 1st Jan or just after, move your 2006 money into another account, so as not to merge 2007 pension payments with earlier payments

other countries with similar laws ? not that I know of, but maybe some of the usual tax havens may well do it
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light at last!

Postby raph » Thu 19 Oct 2006 16:43 GMT

This was what was puzzling me so your advice much appreciated. Many many thanks.
I already transferred some of the pension inSpain over to Cyprus earlier this year. So I could, for example, move most the balance towards year's end to Cyprus, and then start afresh in 2007.
The pension is paid around the 20th of each month from Brussels ...
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to relocate or not to relocate?!

Postby raph » Fri 20 Oct 2006 06:55 GMT

Alas, Rbto is giving Malta the thumbs down. He finds the tax situation extraordinary and largely incomprehensible, comparing unfavourably with that of Cyprus.
On the other hand, from what I hve gleaned so far, seems to me Malta wd make an excellent future part-year base, with rest of year spent travelling/livig i another EU countr but not subject to its tax laws, e.g. Spain.
So we shall see. In the first instance, a holiday in Malta/Gozo would be a sensible approach so shall try to combine that next year with a must visit to Geneva some time between June and September, when the passenger ferry will be in service Cyprus-Mainland Greece.
So thanks for all yr invaluable info to date and we shall see how things pan out in due course.
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Postby gozomark » Fri 20 Oct 2006 07:05 GMT

no probs

the tax situation is actually very simple, the difficulty comes from believing how favourably foreigners get treated compared to locals !

all you have to remember is (this applies to EU citizens)

1. in nearly every case, don't take up permanent residency
2. only bring in capital not income (or bring in less than tnhe Lm 4,700 odd limit per annum), remembering the very generous definitions

that way there is no tax !
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income v. revenue

Postby raph » Sat 21 Oct 2006 19:42 GMT

Still fail to understand fully how income can suddenly become revenue and therefore non-taxeable from 1.1..........
also, can one live on aprox ML 9,000 p.a inclusive of a rental of, say, 150 MIl/month?
anyhow, Rbto re-read al the info I have amalgamated to date and convetedfigs to Euros, and is now willing to relocate!
Thethinkig is to come early July 2007.
I supose since we wd have to pack up ger hee anyway prior to move, we cd keep in storage i Limassol for a couple of months whle cstingaroudn in Malta. If we doNOT like can always return here.
Otherwise, Malta wd seem the better option owing to wider choice of cinemas, for medical care reasons, not to mention acess to plces like Brit Coucil Alliance Francais, ad Spanish and Italian institutes + the University.

.
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Postby gozomark » Sat 21 Oct 2006 19:56 GMT

"income can suddenly become revenue "- it becomes not revenue, but capitla - how ? because thats what tax law for foreigners in Malta says ! I know it sounds like alchemy, but its true

Lm 9,000 per annum incl rent, ie Lm 7,500 odd after rent - can (2 ?) live on it - depends on your lifestyle, but perfectly possible given average Maltese family (2 adults plus 2 + children) live on maybe 6-7,000 pa, and they pay tax on that

if you want direct chat, send me your skype details
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revenue v income

Postby raph » Sun 22 Oct 2006 05:45 GMT

sorry, of course I mean capital, not income.
Skype details?
you man direct email? or tel no?
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Postby gozomark » Sun 22 Oct 2006 05:57 GMT

skype is an internet based, free to use telephone system when you call pc to pc
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Skype

Postby raph » Sun 22 Oct 2006 06:06 GMT

Oh yes a pal told me about it. Phone calls out of Cyprus are so cheap, not sure viable.
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Postby gozomark » Sun 22 Oct 2006 06:13 GMT

the advantages of skype are

1. its completely free, if pc to pc
2. if you are both on broadband, the reception is often much clearer than using a telephone !
3. can do free video conferencing
4. can use for instant messaging
5. free conference calling
6. you can text a mobile using your pc, so a proper keyboard

no I don't have any connection with them, just use them alot !
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skype advantages

Postby raph » Sun 22 Oct 2006 06:23 GMT

Thanks for that clear summary.
Shall look into it when have a mo.
Have urgent studies awaiting me just now.

we have decided to relocate to Malta early July 2007.
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