The Nomad Residence Permits (Income Tax) Rules, 2023

By virtue of Legal Notice 277 of 2023, published on the 7 December 2023, the Minister of Finance has introduced a special tax regime (the ‘Rules’) applicable to an individual in possession of a valid Nomad Residence Permit issued by Residency Malta Agency (hereinafter ‘Qualifying Individual’).

In terms of the Rules, income derived from authorised work (hereinafter ‘Qualifying Income’) shall be charged to income tax in Malta at a flat rate of 10%, subject to double taxation relief. Furthermore, the Qualifying Income shall not be subject to the provisions contained within the Final Settlement System Rules, Subsidiary Legislation 372.14 of the Laws of Malta.

The Rules also provide for an exemption from income tax in Malta on Qualifying Income derived within the first 12 months from the date of issue of (i) the Nomad Residence Permit or (ii) 1 January 2024, whichever is the later date, provided that the Qualifying Individual’s presence and residence in Malta was merely of a casual nature.

The Rules contemplate that the presence in Malta of a Qualifying Individual deriving Qualifying Income should not of itself constitute income arising in Malta by the employer or client of the Qualifying Individual. Nonetheless, it would be recommended that the tax profile of the employer or client of the Qualifying Individual is assessed on a case by case.