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Residency status and immigration issues

eResidence card renewal

Permanent Residency, Ordinary Residency or Temporary Residency? It depends on your financial circumstances, not on how much time you will spend in Malta. Getting it wrong could cost you dearly!

Re: eResidence card renewal

Postby gozomark » Thu 18 Oct 2018 14:55 GMT

if you are permanent resident then pay tax on your worldwide income, subject to tax free allowance and double taxation treaty - in other words if you are permanent resident then same tax treatment as a Maltese citizen

The 35K is a separate issue, and applies to any foreigner resident in Malta and not domiciled in Malta, whether permanent or ordinary

my wifes renewal was dependent on getting mine done, once it was it was a simple issue as was renewal not first time
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Re: eResidence card renewal

Postby hereandthere » Thu 18 Oct 2018 18:03 GMT

Am I reading the Budget 2018 changes correctly?

Ordinary resident, non domiciled residents now have a minimum tax charge of 5000 euro if their income is above 35K
f it is less than 35k then they pay pro-rata tax?
from CBS group;-

By virtue of the Budget Implementation Act 2018, a new article has been introduced in the Income Tax Act of Malta (Chapter 123) that relates to the remittance basis of taxation. The revisions introduced in this Bill are aimed to introduce a minimum annual tax payable by individuals who are subject to tax on a remittance basis.

At present, individuals who are ordinarily resident but not domiciled in Malta and who have income arising outside of Malta are only being charged for tax in Malta on the income earned in Malta or remitted and received in Malta. As a result of the changes in the proposed bill, such individuals, with effect from year of assessment 2019 for effective basis year 2018, will be subject to a minimum tax of €5,000 annually in Malta. This tax would apply to such individuals who have an income of at least €35,000 per annum coming from outside Malta. The minimum tax of €5,000 in Malta is due irrespective of whether the foreign sourced annual income is remitted to Malta or not.

A non-domiciled person will not be liable to pay the minimum tax of €5,000 if he or she does not have income arising outside of Malta that amounts to €35,000 per annum or more. Where income amounts to less than this amount, tax will be deducted at the applicable rates of tax. For the purpose of being able to provide proof in case of an audit or inspection by the Commissioner for Revenue, the taxpayer will be required to prove that he or she did not have income arising outside of Malta which amounted to at least €35,000 per annum.
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Re: eResidence card renewal

Postby gozomark » Thu 18 Oct 2018 18:07 GMT

If worldwide income exclusive malta is less than 35k then only taxable on income remit to malta, ie no change
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Re: eResidence card renewal

Postby hereandthere » Thu 18 Oct 2018 18:33 GMT

Hi Mark and greetings,
That is how I read it first time, but there are a few versions out there, the last couple painted a different picture, from above;-

''A non-domiciled person will not be liable to pay the minimum tax of €5,000 if he or she does not have income arising outside of Malta that amounts to €35,000 per annum or more. Where income amounts to less than this amount, tax will be deducted at the applicable rates of tax. For the purpose of being able to provide proof in case of an audit or inspection by the Commissioner for Revenue, the taxpayer will be required to prove that he or she did not have income arising outside of Malta which amounted to at least €35,000 per annum''
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Re: eResidence card renewal

Postby gozomark » Thu 18 Oct 2018 18:39 GMT

There is no taxation on worldwide income if you are non domiciled ordinary resident, unless you bring it into Malta
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Re: eResidence card renewal

Postby gozomark » Thu 18 Oct 2018 18:41 GMT

Even if you have income of 1,000,000 outside of Malta - you will have a 5,000 charge, unless you bring into Malta or earn in Malta an amount that pushes your tax bill over 5,000
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Re: eResidence card renewal

Postby hereandthere » Thu 18 Oct 2018 18:45 GMT

Thanks Mark, I know you will have asked the right people. The words are confusing though!
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Re: eResidence card renewal

Postby gozomark » Thu 18 Oct 2018 18:55 GMT

agree, poorly written law


however the intention was NOT to abolish the non remittance policy, but to make sure those earning over a certain level pay a minimum amount of tax, I presume under pressure from the EU. Those earning under no change, those earning way over, effectively no change in the scheme of things.

what will be interesting is how its actually applied - will the double taxation treaty apply ? will pensions be excluded ? what counts as Malta based earnings, if they are to be excluded from the 35,000 calculation ? eg will overseas bonds held in a Maltese brokerage account count as foreign or local earnings - what about shares listed overseas but held in local account.

for those close to the limit, it will encourage those to bring capital into Malta
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Re: eResidence card renewal

Postby gozomark » Thu 18 Oct 2018 19:07 GMT

IF the intention was to abolish the non remittance rule, they would have abolished it
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Re: eResidence card renewal

Postby hereandthere » Thu 18 Oct 2018 19:59 GMT

Yes that makes sense but maybe this is the first step in abolishing the non remittance rule, once installed they can gradually reduce the figure if they want. Not sure of the politics and finance behind the move ( are we expats a burden or benefit?) ,as you say it could be to appease the EU overlords.
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