As in almost every country, there is also an obligation in Malta to submit an income tax return once a year. This not only applies to entrepreneurs and the self-employed, but also to private individuals who have moved 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 basic questions about this topic. The following piece is meant therefore to explain the fundamentals of tax returns in Malta and provide answers to frequently asked questions, including two case studies that should make you feel better acquainted with the complex topic. Keep reading to the end for an additional short checklist that’ll be of use as you get started.
Essential Information on Tax Returns in Malta—Dates and Deadlines
In Malta, tax returns for the previous year must be submitted by June 30 (forms for private returns are sent by post in May).
Who Must File a Tax Return Form?
EVERYONE! Every person who lives in Malta has to file a tax return, whether you are employed, a retiree, freelancer, or living on your savings—everyone is required to submit a tax return.
Which Authority is Responsible for the Private Tax Return?
The Inland Revenue Department is responsible for tax returns in Malta. Here, forms are sent by post; if you do not receive one, you can call them (at 153) or stop in (Block 4, Triq Vincenzo Dimech, Il-Floriana). Our experience is that employees on site are very helpful and courteous.
Who Can I Contact if I Have Problems Filing My Tax Return Form?
If you need help with either general or highly specific questions, Inland Revenue (IRD) is there to assist. If it is a very specific question, the customer service representative might ask you to write an email with the request (taxpayerservice.cfr@gov.mt). Please don’t expect an answer immediately—it can take a few days or more.
Why Have I Not Yet Received a Tax Return Form?
The most common reason for not receiving your form is a move that was either not communicated to the authorities or communicated too late.
Even if you move your primary residence to Malta, you might not receive the form if you have not been properly registered.
If you have lived in Malta for several years and have not received your form, it may be that you are registered as a “non-filer.”
“Non-filer” means the IRD will no longer send you a tax return and that the data of your income might for example be provided by your employer. Please note: In this case you do NOT have to submit a tax return—you are exempt!
Can I Register as a “Non-Filer”?
No, the authorities decide who is or will be a “non-filer.” There is no standard procedure here and you will also not be informed by mail.
If you want to find out if you’re down as a “non-filer,” you can call 153 (if currently on Malta) and inquire by phone.
In our experience, the status of “filer” is changed to “non-filer” after 3 years. This means if you have submitted your form 3 years in a row, you will get the status of “non-filer” in Malta from the fourth year on. You must, however, always confirm this with the authorities.
Have Something to Declare/You Must Pay Taxes on Something but You Have Not Received a Tax Return from the Authorities?
Please don’t be led to believe you have nothing to declare simply because you haven’t received a return in the mail. You might still be obligated to do so!
Please call the IRD 153 and explain that you need a tax return so that you can properly declare everything.
You’re New in Malta and Not Sure How to Proceed?
Whether you have something to declare (such as income, expenses, rental income, or pension payouts) or not, you are obliged to submit a tax return. You might be a pensioner or employed or living on your savings—everyone who resides in Malta must submit the paperwork.
You are not Generating any Income in Malta but have a Worldwide Income of More Than €35,000?
Since 2018, a new rule has come into effect. There is a minimum tax liability on a worldwide income of more than €35,000. This means if you’ve earned more than €35,000 anywhere in the world, you have to pay a €5,000 flat rate. This is also declared in the tax return.
In calculating such minimum tax liability, any tax paid in terms of Maltese law, whether by withholding or otherwise, should be taken into account, unless it is a final tax paid on the transfer of immovable property situated in Malta. The said minimum tax liability of EUR 5,000 should be calculated before double tax relief.
This “world income” addresses the case that there is unlimited tax liability (which applies in most countries). In that case, you will inevitably have to have taxed both domestic and foreign income. In concrete terms, this means that, regardless of your source of income, you are subject to tax in the country where you have your (official, tax) residence or place of business. To avoid double taxation, double taxation agreements exist between countries in most cases.
Have You Left Malta Without Giving Proper Notice of Departure?
When leaving Malta, you should give notice to the authorities, such as JobsPlus and the IRD.
JobPlus
For JobsPlus, a short email with the information that you’ll be leaving Malta is sufficient (jobsplus@gov.mt). It’s best to ask for an acknowledgment in return. Employers are asked to give notice to employees, but it’s a step that is often overlooked.
Inland Revenue
With the Inland Revenue, the process is similar: you can either stop by in person (Expat Section, 4, Triq Vincenzo Dimech, Il-Floriana) or send an email (taxpayerservice.cfr@gov.mt). Be sure to include the following information in your email:
- When you will be leaving Malta.
- Your new place of residence.
- Request your form for the current year. That means if you leave Malta in 2022, ask for the 2022 tax return.
- Ask for confirmation that the three points above have been processed.
With regard to the open tax return, it is important to inform the authorities of the place where you’d like to receive the form. Once received, fill it out and return it to the IRD. In the last year of your residence, meaning the year in which you leave Malta, you will usually receive a tax credit.
Case Studies from Practice
Now that you’ve gotten answers to some frequently asked questions, we’ll give you two examples from our practice that will give you a better understanding of tax returns in Malta.
Example 1: Retirees Who Don’t File Tax Returns
Two years ago, a pair of retirees approached us because of the new worldwide income regulation. In previous years, they’d lived on their savings, had assumed there was nothing to tax, and did not file a tax return. Their assumption, however, was incorrect.
Even if you have nothing to pay tax on, you have to file a tax return. To receive the paperwork in the first place, you’ll need to get an ID card or a tax ID number.
Example 2: Employee Leaves Malta
Here’s another example: A woman who has worked in Malta for 3 years and hasn’t submitted a tax return in 3 years. It was only after leaving that she discovered she should have filed, so she came to Dr. Werner & Partner for help. Together, we submitted the tax returns for the last three years. We were also able to offset the late-filing penalties with a tax credit in the last filing year.
If you have any questions regarding this subject, please don’t hesitate to contact us at any time.
Checklist: How to Properly File Your Tax Return in Malta
Make sure to contact the Inland Revenue Department (IRD) to see that
- you are properly registered with your current home address. To do so, simply give them a call at 153.
Check if you are registered with your current address
See to the first two points and you should receive an income tax return in your mailbox
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 or confirmation from the IRD usually takes several months. If you have done everything correctly, you‘ll receive a „statement.“ If there’s anything amiss, the tax return comes back with a note.
Disclaimer: The above-mentioned article is simply based on independent research carried out by Dr. Werner and Partner and cannot constitute any form of legal advice. If you would like to meet up with any of our representatives to seek further information, please contact us for an appointment.
