Malta’s 15% tax regime explained: who can benefit

This article explains how the regime works, when it can be useful, and what British entrepreneurs should consider before the rules change in 2027.

How Malta’s 15% tax regime actually works

The first point to understand is that the 15% rate does not apply to all of a resident’s income. It usually applies to foreign-source income that is remitted to Malta. Other chargeable income, including locally sourced income, is generally taxed at 35%.

The system also uses a remittance basis. A person who is resident but not domiciled, or not ordinarily resident in Malta, is taxed on local income and on foreign income brought into the country. Foreign income that remains abroad is outside the tax charge.

Foreign capital gains are treated differently. Under the remittance basis, gains arising abroad are not taxed even when the proceeds are brought into Malta. This distinction between income and capital gains can make a major difference, so each source of funds needs to be classified correctly.

The 15% rate is available through several programmes, including the Global Residence Programme, the Residence Programme, and the Malta Retirement Programme. Each has its own eligibility rules and conditions.

Under the Malta Global Residence Programme, beneficiaries must pay at least €15,000 in tax each year. This means that if 15% of foreign income produced a €9,000 tax bill, the €15,000 minimum would still apply.

What the 15% regime means for international business owners

Entrepreneurs often receive income from several countries and in different forms. A founder may own a UK company, receive dividends from abroad, hold an investment portfolio, and rent out property overseas. Under Malta’s special tax regime, the treatment depends on where the income arises, what type of income it is, and whether it is received in Malta.

Common examples include:

1. Dividends from overseas companies. Foreign dividends received in Malta can qualify for the 15% rate if the relevant conditions are met.
2. Investment income. Foreign interest and other qualifying investment income may also fall within the 15% rate when received in Malta.
3. Overseas rental income. Rent from property abroad may qualify as foreign-source income and benefit from the special rate.
4. Business income. The treatment depends on where the income arises. Registering a company abroad does not automatically make all payments from it foreign-source income.
5. Malta-source income. Income arising in Malta does not qualify for the 15% rate and may instead be taxed at 35%.

British entrepreneurs must also consider their UK tax position separately. Obtaining residence or special tax status in Malta does not automatically make someone non-resident in the United Kingdom. UK tax residence is determined under the Statutory Residence Test, which considers factors such as time spent in the UK, work, and other connections.

How the Global Residence Programme provides access to the regime

The Malta Global Residence Programme is open to people who are not nationals of the EU, EEA, or Switzerland, which makes eligible British citizens potential applicants. It provides access to special tax status, but applicants must also meet financial, personal, and residence requirements.

Property requirement. The minimum purchase price is €275,000 in most of Malta and €220,000 in the south of Malta or Gozo. Alternatively, applicants can rent for at least €9,600 a year in most areas or €8,750 in the south or Gozo. A rental agreement must run for at least 12 months, and the property must serve as the applicant’s principal place of residence.

Administrative fee. Applicants must pay a non-refundable fee of €6,000. It is reduced to €5,500 for those who buy property in the south of Malta.

Tax and finances. Beneficiaries must pay at least €15,000 in tax each year and show stable and regular resources sufficient to support themselves and their dependants. To keep the special tax status, they must not spend more than 183 days in any other single jurisdiction during a calendar year.

Personal requirements. Applicants need a valid travel document and health insurance covering themselves and their dependants across the EU. They must also be able to communicate adequately in English or Maltese and pass fit-and-proper checks, including providing a police conduct certificate.

Family members. Family members, including spouses, as well as principally dependent children under 25, siblings, parents, and grandparents, can join the application. This makes the GRP relevant to entrepreneurs planning residence for both themselves and their families.

The combination of tax, property, and ongoing residence requirements means that suitability should be assessed as a whole rather than on the 15% rate alone.

What is changing in 2027

Malta is restructuring its special tax programmes. Legal Notice 195 of 2026 introduces the Individual Tax Programme Rules, which take effect on January 1st, 2027, and bring several existing programmes under a single framework. The new system will include Global Resident Status for the group currently covered by the Global Residence Programme.

Under the new framework, qualifying foreign-source income received in Malta will continue to benefit from the 15% rate, while other non-qualifying income is taxed at 35%. However, the financial thresholds will become substantially higher.

For Global Resident Status, the minimum annual tax will rise to €35,000. New applicants will also face a property threshold of €700,000 for a purchase or €14,000 in annual rent, as well as an €8,500 application fee. The new special tax status will be granted for 5 years and can be renewed.

The new rules will also narrow the definition of dependants. Under the current requirements, principally dependent parents, grandparents, and siblings can be included in the application. Under the 2027 framework, the dependant category is more limited and focuses mainly on a spouse or partner and children. This makes the new regime less flexible for families.

Timing therefore matters for people considering applying under the current Global Residence Programme. Existing beneficiaries and people who submit applications by December 31st, 2026, can remain under the existing framework until December 31st, 2031, subject to the relevant conditions.

Conclusion

Malta’s 15% tax treatment can be relevant to British business owners with international income, but the current Global Residence Programme rules will not remain unchanged for long. Prospective applicants should compare the existing framework with the 2027 rules before deciding when to apply.

Contact Immigrant Invest to assess whether the programme fits your residence and tax planning goals.