The Nomad Residence Permits (Income Tax Rules)

The Nomad Residence Permits (Income Tax) Rules were transposed through LN 277 of 2023 on 7 December 2023. Under these regulations, individuals from Third Countries holding a valid nomad residence permit are eligible for a tax exemption in the first 12 months of residence, and to a reduced income tax rate of 10% on their chargeable income arising from “authorised work.” The Nomad Residence Scheme is an initiative tailored to appeal remote workers and freelancers from third countries, the opportunity to live and work from Malta. Referred to as ‘eligible main applicant’, individuals under this scheme can avail themselves from a reduced rate of tax on income derived from authorised remote work. To qualify as ‘eligible main applicant’, individuals must be engaged in work that is location-independent and conducted using information technology whilst carrying out ‘authorised work’ which falls under any one of the following three categories:

1. 1. the Nomad Residence Permit; or
   2. 1st of January 2024;

Whichever occurs later unless he files with Residency Malta Agency a written declaration that his residence in Malta, even during the said period of twelve (12) months, is not merely of a casual nature. Implications of the exemption and flat rate may vary substantially and thus fact patterns will need to be determined on a case-by-case basis. Other income derived by the eligible main applicant that does not fall under ‘authorised work’ will be subject to tax at the normal progressive rates of tax (10% reduced rate will not apply). Similarly, income derived by any dependants (family members) of the eligible main applicant who is authorised as such by Residency Malta Agency, do not qualify from the flat 10% rate but are subject to tax at the progressive rates of tax. The aforementioned is not meant to be an exhaustive list, and additional factors may come into play based on an individual’s specific circumstances. Our dedicated team is committed to providing tailored guidance that aligns with the individual’s specific needs and circumstances. As your representatives, we can assist you in preparing and gathering the necessary application forms and supporting documentation for submission to the relevant Maltese authorities. Moreover, we ensure an open line of communication is maintained between the individual and the authorities, with the ultimate goal of ensuring a seamless and successful process.

• • Hold a valid travel document;
  • Hold a health insurance policy (can be a foreign health insurance policy) covering all risks in Malta;
  • Undergo biometric testing;
  • Adhere to visa requirements;
  • Hold a valid property rental or purchase agreement in Malta; and
  • Earn yearly income of at least €42,000.

Third Country nationals who are in possession of a valid nomad residence permit (hereinafter “eligible main applicant”) shall qualify for a reduced income tax rate of 10% on their chargeable income derived from “authorised work”. This shall be deemed to constitute the first part of the person’s total chargeable income. In addition to this, an eligible main applicant will be exempt from income tax in Malta on income derived from authorised work for the initial twelve (12) months from the issuance of:

1. 1. the Nomad Residence Permit; or
   2. 1st of January 2024;

Whichever occurs later unless he files with Residency Malta Agency a written declaration that his residence in Malta, even during the said period of twelve (12) months, is not merely of a casual nature. Implications of the exemption and flat rate may vary substantially and thus fact patterns will need to be determined on a case-by-case basis. Other income derived by the eligible main applicant that does not fall under ‘authorised work’ will be subject to tax at the normal progressive rates of tax (10% reduced rate will not apply). Similarly, income derived by any dependants (family members) of the eligible main applicant who is authorised as such by Residency Malta Agency, do not qualify from the flat 10% rate but are subject to tax at the progressive rates of tax. The aforementioned is not meant to be an exhaustive list, and additional factors may come into play based on an individual’s specific circumstances. Our dedicated team is committed to providing tailored guidance that aligns with the individual’s specific needs and circumstances. As your representatives, we can assist you in preparing and gathering the necessary application forms and supporting documentation for submission to the relevant Maltese authorities. Moreover, we ensure an open line of communication is maintained between the individual and the authorities, with the ultimate goal of ensuring a seamless and successful process.

1. 1. work for an employer registered in a foreign country and have a contract of work;
   2. conduct business activities for a company registered in a foreign country and of which applicant is partner/shareholder; or
   3. offer freelance or consulting services, to clients having a permanent establishment in a foreign country, and with whom the applicant has a contractual relationship.

By satisfying the criteria, an eligible main applicant authorised as such by Residency Malta Agency will be issued with the nomad residence permit. In addition to the above, the applicant must also:

• • Hold a valid travel document;
  • Hold a health insurance policy (can be a foreign health insurance policy) covering all risks in Malta;
  • Undergo biometric testing;
  • Adhere to visa requirements;
  • Hold a valid property rental or purchase agreement in Malta; and
  • Earn yearly income of at least €42,000.

Third Country nationals who are in possession of a valid nomad residence permit (hereinafter “eligible main applicant”) shall qualify for a reduced income tax rate of 10% on their chargeable income derived from “authorised work”. This shall be deemed to constitute the first part of the person’s total chargeable income. In addition to this, an eligible main applicant will be exempt from income tax in Malta on income derived from authorised work for the initial twelve (12) months from the issuance of:

1. 1. the Nomad Residence Permit; or
   2. 1st of January 2024;

Whichever occurs later unless he files with Residency Malta Agency a written declaration that his residence in Malta, even during the said period of twelve (12) months, is not merely of a casual nature. Implications of the exemption and flat rate may vary substantially and thus fact patterns will need to be determined on a case-by-case basis. Other income derived by the eligible main applicant that does not fall under ‘authorised work’ will be subject to tax at the normal progressive rates of tax (10% reduced rate will not apply). Similarly, income derived by any dependants (family members) of the eligible main applicant who is authorised as such by Residency Malta Agency, do not qualify from the flat 10% rate but are subject to tax at the progressive rates of tax. The aforementioned is not meant to be an exhaustive list, and additional factors may come into play based on an individual’s specific circumstances. Our dedicated team is committed to providing tailored guidance that aligns with the individual’s specific needs and circumstances. As your representatives, we can assist you in preparing and gathering the necessary application forms and supporting documentation for submission to the relevant Maltese authorities. Moreover, we ensure an open line of communication is maintained between the individual and the authorities, with the ultimate goal of ensuring a seamless and successful process.

• • Hold a valid travel document;
  • Hold a health insurance policy (can be a foreign health insurance policy) covering all risks in Malta;
  • Undergo biometric testing;
  • Adhere to visa requirements;
  • Hold a valid property rental or purchase agreement in Malta; and
  • Earn yearly income of at least €42,000.

Third Country nationals who are in possession of a valid nomad residence permit (hereinafter “eligible main applicant”) shall qualify for a reduced income tax rate of 10% on their chargeable income derived from “authorised work”. This shall be deemed to constitute the first part of the person’s total chargeable income. In addition to this, an eligible main applicant will be exempt from income tax in Malta on income derived from authorised work for the initial twelve (12) months from the issuance of:

1. 1. the Nomad Residence Permit; or
   2. 1st of January 2024;

Whichever occurs later unless he files with Residency Malta Agency a written declaration that his residence in Malta, even during the said period of twelve (12) months, is not merely of a casual nature. Implications of the exemption and flat rate may vary substantially and thus fact patterns will need to be determined on a case-by-case basis. Other income derived by the eligible main applicant that does not fall under ‘authorised work’ will be subject to tax at the normal progressive rates of tax (10% reduced rate will not apply). Similarly, income derived by any dependants (family members) of the eligible main applicant who is authorised as such by Residency Malta Agency, do not qualify from the flat 10% rate but are subject to tax at the progressive rates of tax. The aforementioned is not meant to be an exhaustive list, and additional factors may come into play based on an individual’s specific circumstances. Our dedicated team is committed to providing tailored guidance that aligns with the individual’s specific needs and circumstances. As your representatives, we can assist you in preparing and gathering the necessary application forms and supporting documentation for submission to the relevant Maltese authorities. Moreover, we ensure an open line of communication is maintained between the individual and the authorities, with the ultimate goal of ensuring a seamless and successful process.

1. 1. work for an employer registered in a foreign country and have a contract of work;
   2. conduct business activities for a company registered in a foreign country and of which applicant is partner/shareholder; or
   3. offer freelance or consulting services, to clients having a permanent establishment in a foreign country, and with whom the applicant has a contractual relationship.

By satisfying the criteria, an eligible main applicant authorised as such by Residency Malta Agency will be issued with the nomad residence permit. In addition to the above, the applicant must also:

• • Hold a valid travel document;
  • Hold a health insurance policy (can be a foreign health insurance policy) covering all risks in Malta;
  • Undergo biometric testing;
  • Adhere to visa requirements;
  • Hold a valid property rental or purchase agreement in Malta; and
  • Earn yearly income of at least €42,000.

Third Country nationals who are in possession of a valid nomad residence permit (hereinafter “eligible main applicant”) shall qualify for a reduced income tax rate of 10% on their chargeable income derived from “authorised work”. This shall be deemed to constitute the first part of the person’s total chargeable income. In addition to this, an eligible main applicant will be exempt from income tax in Malta on income derived from authorised work for the initial twelve (12) months from the issuance of:

1. 1. the Nomad Residence Permit; or
   2. 1st of January 2024;

Whichever occurs later unless he files with Residency Malta Agency a written declaration that his residence in Malta, even during the said period of twelve (12) months, is not merely of a casual nature. Implications of the exemption and flat rate may vary substantially and thus fact patterns will need to be determined on a case-by-case basis. Other income derived by the eligible main applicant that does not fall under ‘authorised work’ will be subject to tax at the normal progressive rates of tax (10% reduced rate will not apply). Similarly, income derived by any dependants (family members) of the eligible main applicant who is authorised as such by Residency Malta Agency, do not qualify from the flat 10% rate but are subject to tax at the progressive rates of tax. The aforementioned is not meant to be an exhaustive list, and additional factors may come into play based on an individual’s specific circumstances. Our dedicated team is committed to providing tailored guidance that aligns with the individual’s specific needs and circumstances. As your representatives, we can assist you in preparing and gathering the necessary application forms and supporting documentation for submission to the relevant Maltese authorities. Moreover, we ensure an open line of communication is maintained between the individual and the authorities, with the ultimate goal of ensuring a seamless and successful process.