Digital Nomad Tax

Updated Tax Rule for Digital Nomads in Malta: Here’s How It Works

Recently the updated tax rule for digital nomads in Malta was announced. Before, a lot of digital nomads lived in uncertainty about their tax status in Malta. The country promoted itself to digital nomads and claimed to offer tax incentives. However, these tax incentives were actually not incorporated in the tax rules. Hence, this led to many nomads actually having to pay income tax which they didn’t anticipate for.

In this article, we’ll dive deeper into the updated tax rule for digital nomads in Malta.

updated tax rule for digital nomads in malta

How the Updated Tax Rule for Digital Nomads in Malta Works: Requirements and Criteria

The updated tax rule for digital nomad in Malta provides clarity on your tax status. Not only this, you can also use it to optimize your taxes! The new tax rules state that you will only pay income tax on qualifying income from authorized work at a rate of 10%.

Furthermore, you don’t have to pay any income tax during the first twelve months from the date of issue of your nomad residence permit. Definitely a better deal than paying income taxes according to the normal rates as these go up to 35%.

You need to understand that these tax rules only apply to permit holders of the digital nomad visa in Malta. This also means that this opportunity is not open to people with a European passport as they can’t apply for the nomad digital nomad visa Malta or Nomad Residence Permit.

Nevertheless, also for European digital nomads Malta is an interesting place to organize your taxes. You can read more about it in the article on tax residency in Malta for digital nomads.

What is Authorized Work?

When applying for the digital nomad visa you will show that you work for a foreign employer or have your own business abroad. Therefore, you will receive a wage from your foreign employer. Or, when you own your own business, you get income from your clients.

Both of these types of work can qualify as authorized work. Hence, the income you receive can benefit from the advantageous tax rules. You do need to be aware though that you can’t receive any income from Maltese source though. This means that your employer shouldn’t be operating there or that you shouldn’t have clients there.

Nomad Residence Permit: What Is It and How To Get It?

Why would you want to obtain a nomad residence permit or digital nomad visa? If you have a European passport, you don’t need to obtain a specific visa to travel to Malta. However, if you are from a third country, you can only visit the Schengen Area for 90 days every 180 days. If you want to stay longer, you need a visa or residency permit. In comes the nomad residence permit of digital nomad visa.

The first condition concerns the work you perform, you must either:

  • Work for a foreign employer;
  • Work as a freelancer for foreign companies;
  • Be a partner or shareholder of a foreign business and conduct business on its behalf.

If you in any way work for a Maltese company, you can’t obtain the nomad residence permit.

Furthermore, you must have a gross salary of minimum €42.000 (as from 1 April 2024) per year coming from the aforementioned activities.

Apart from these conditions, more general requirements apply like having a valid health insurance and passing a background check. In addition, you will need to own or rent a place in Malta. You also have a look at the website of the Maltese government to find more information about the nomad residence permit.

If you want to learn more about how to optimize your taxes by moving to Malta or another country, reach out to me! I have helped countless nomads with optimizing their tax situation.

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