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These rules, which came into effect on1st January 2024, allow third country nationals in possession of a 'Nomad Residence Permit' issued in terms of the Immigration Act to provide exclusively'authorised work' as defined.
'Authorised work' provided remotely by means of telecommunications technology as may be approved by the Residency Malta Agency means
- Services provided by the eligible applicant in accordance with a contract of employment to a non-resident foreign employer not operating through a fixed place of business in Malta; or
- Services performed in a self-employed capacity to non-resident clients not having a fixed place of business in Malta.
The Rules also define an 'eligible main applicant' as an inpidual who is in possession of a valid Nomad Residence Permit.
The guidelines – Key clarifications
- Registration – Eligible main applicants are automatically registered for tax purposes upon receipt of the Nomad Residence Permit and file a tax return accordingly. They are also obliged to inform the relevant authorities of any changes in their employment status.
- Applicable tax rate – A 10% tax rate is applied to the chargeable income derived from authorised work of the eligible main applicant and treated as the first part of the person's total chargeable income subject to any double taxation relief. If the eligible main applicant is no longer eligible for a nomad status any income earned would be subject to the standard progressive tax rates applicable to inpiduals.
- Income from authorised work will not be charged to tax before the end of the 12 months from the later date on which the Nomad Residence Permit is issued or 1st January 2024,unless a written declaration is filed with Residency Malta Agency stating that residence in Malta, even during the said period of 12 months, is not merely of a casual nature.
- Other chargeable income shall constitute the last part of the income and be subject to the progressive marginal tax rates applicable to inpiduals.
- Final Settlement System – (FSS) – Eligible applicants fall outside the scope of the FSS rules and their non-resident employers are not obliged to fulfil any requirements related to the employment of the Nomad ResidencePermit holder, unless the employer becomes resident and/or operates through a fixed place of business in Malta.
- Compliance requirements – Nomad Residence Permit holders must ensure full compliance with the requirements of the Income Tax Acts, including relevant and timely submission of tax returns, as well as payment of any tax due by the settlement date.
- Tax Residency Certificate – Acceptance as a nomad does not grant tax residency.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
