As in almost every country, you are obliged to submit your tax return once a year in Malta. This applies not only to entrepreneurs and the self-employed, but also to private individuals who have relocated their center of life to Malta.
At DW& P, we support almost all clients in filing their tax returns and therefore know that some people have fundamental questions on this topic. For this reason, in this article we would like to explain the basics of tax returns in Malta and provide answers to frequently asked questions, including two case studies to help you understand this complex topic. You will also receive a short checklist from us at the end of the article.
Basic information on tax returns in Malta – dates and deadlines
In Malta, the tax return for the previous year must be submitted by June 30th – the documents for the private tax return are sent by post every year in May.
What does tax return mean in English?
Tax return in English means: Income Tax Return
Who all has to submit a tax return?
ALL! Every person living in Malta must file a tax return – whether you are an employee, pensioner, self-employed or living off your savings. Everyone is obliged to submit a private tax return.
Which authority is responsible for private tax returns?
The Inland Revenue Department is responsible for tax returns in Malta. In Malta, tax returns are sent by post – if you do not receive one, you can call them (telephone number: 153) or go by (Block 4, Triq Vincenzo Dimech, Il-Floriana). Experience has shown that the people in charge on site are very helpful and courteous.
Who can I contact if I have problems with my tax return?
If you need help, whether you have general questions or very specific questions, Inland Revenue (IRD) will help you. If it is a very specific question, the Customer Service employee may ask you to write an e-mail(taxpayerservice.cfr@gov.mt) with your request. Please do not expect an answer within a few days, this may take longer.
What could be the reason why you have not yet received your tax return?
The most common reason for not submitting a tax return is a move that has either not been communicated to the relevant authorities or has been communicated too late. Even if you move the center of your life to Malta, you may not receive your tax return because you may not yet be properly registered.
If you have been resident in Malta for several years and have not received a tax return, you may be registered as a “non-filer“.
“Non-filer” means that the IRD collects your income data from your employer, for example, and no longer sends you a tax return
Please note: In this case you do NOT have to submit a tax return and are therefore exempt!
Can I register as a “non-filer”?
No, the authorities decide who is or becomes a “non-filer”. There is also no exact procedure and you will not be informed by post.
If you want to find out whether you are a “non-filer”, you can call 153 (only works if you are currently in Malta) and find out over the phone.
In our experience, the status “Filer” is changed to “Non-Filer” after 3 years. So if you have submitted your tax return for 3 years in a row, you will receive the status “Non-Filer” in Malta from the 4th year onwards. However, you must always have this confirmed by the authorities.
You have something to declare, i.e. you have to pay tax and have not received a tax return from the authorities?
Please do not think that you do not have to declare anything just because you did not receive a tax return in the post. You are obliged to do so!
Please call IRD “153” and explain that you need a tax return so that you can declare everything.
Are you new to Malta and don’t know what to do?
Regardless of whether you have anything to declare (such as income, expenses, rental income or pension) or not, you are obliged to submit a tax return. Whether you are a pensioner, an employee or living off your savings – everyone who is resident in Malta is obliged to do so.
You do not generate any income in Malta but have more than € 35,000 global income?
There has been a new rule here since 2018. There is a minimum tax liability on global income of more than € 35,000. So if your global income is at least €35,000, you have to pay €5,000 (flat rate). This is also declared in the tax return.
In calculating this minimum tax liability, any tax paid under Maltese income tax law, whether by withholding tax or otherwise, should be taken into account, unless it is a final tax paid on the transfer of real property situated in Malta. The aforementioned minimum tax liability of €5,000 should be calculated before relief from double taxation is granted.
Global income describes the case of unlimited tax liability (unlimited tax liability applies in most countries). You will then have to pay tax on both domestic and foreign income. In concrete terms, this means that you are liable for tax in the country where you have your (tax) domicile or registered office, regardless of the source of your income. In order to avoid double taxation, so-called double taxation agreements (DTAs) exist between the countries in most cases.
You have left Malta and have not logged out properly?
When you leave Malta, you should deregister with the authorities such as JobsPlus and Inland Revenue.
JobPlus
With JobsPlus, a short e-mail ( jobsplus@gov.mt) with the information that you will be leaving Malta is sufficient. It is also best to ask JobsPlus to confirm that you are deregistered. The employer is obliged to always deregister employees from JobsPlus, but this is often forgotten by the employer.
Inland Revenue
The procedure is similar at Inland Revenue, where you can either go in person (Expat Section, 4, Triq Vincenzo Dimech, Il-Floriana) or send an e-mail(taxpayerservice.cfr@gov.mt). This e-mail should contain the following information:
- You will be leaving Malta
- Inform the authorities of your new place of residence
- Request your tax return for the current year. So if you leave Malta in 2022, ask for the 2022 tax return.
- Ask for confirmation that the 3 points above are being processed
With regard to the open tax return, it is important to inform the authority of the place where you wish to receive the tax return. Then fill out the form and send it back to the IRD. In the last year, i.e. the year in which you leave Malta, you will usually receive a tax credit.
Case studies from practice
Now that you have received answers to frequently asked questions, we will give you two practical examples to give you a better understanding of the tax declaration in Malta.
Example 1: Pensioner without submitting a tax return
Two years ago, a retired couple approached us because of the new world income regulation. As you had always lived off your savings in previous years, you assumed that there was nothing to pay tax on and therefore did not submit a tax return. However, this assumption is wrong! Even if you have nothing to pay tax on, you still have to submit a tax return. In order to obtain these at all, you should obtain an ID card or a tax number.
Example 2: Employee leaves Malta
Another example is a lady who worked as an employee in Malta for 3 years and did not file a tax return for those 3 years. As she only found out on her departure that she should have done this, she approached Dr. Werner & Partner so that we could support her. Together with her, we submitted the tax return for the last three years. We were also able to offset the penalties due to the late submission with a tax credit last year.
If you have any questions regarding a tax return, we will be happy to help you at any time.
Checklist – How to file your tax return in Malta correctly
- Check that you are correctly registered with the Inland Revenue Department (IRD ) – simply call them on 153
- Check whether you are registered with your current address
If the first two points are met, you should soon have a tax return (Income Tax Return) in your letterbox.
- Fill in everything that needs to be declared and send it back to the IRD in the envelope provided. Address: FSS Section, 4, Triq Vincenzo Dimech, Il-Floriana)
Feedback from the IRD usually takes several months. If you have done everything correctly, you will receive a “statement”. If it is incorrect, the tax return is returned with a note.
