Residence status and tax implications

Permanent Residency, Ordinary Residency or Temporary Residency? It depends on your financial circumstances, not on how much time you will spend in Malta. Getting it wrong could cost you dearly!

Postby gozomark » Tue 25 Sep 2007 08:29

they charge me Lm 100 + VAT, which after the UK is amazingly cheap
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cheap accountants

Postby billy » Wed 26 Sep 2007 07:09

For Malta its cheap but I was used to pay less then 50 euros for a yearly tax filing. However in many countries this is done electroniclly. Paperwork and handeling is always more expensive.
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Postby gozomark » Wed 26 Sep 2007 07:14

AFAIK you can file electronically in Malta as well, and you don't have to use an accountant - many foreigners don't
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mygov.mt

Postby billy » Wed 26 Sep 2007 09:36

Thanks for the tip Gozomark. I just found mygov.mt where yes you can file electronicly. It just openend. But does it work with capital remitances like you do yourselve?
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Postby gozomark » Wed 26 Sep 2007 09:50

you don't need to tell them of capital remitances - you declare how much income you bring in, not capital
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bankstatement

Postby billy » Wed 26 Sep 2007 09:54

Hold on Gozomark. By your tax declaration you have to send a copy of your bankstatements. How will they differ capital from income when they check the remitances?
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Postby gozomark » Wed 26 Sep 2007 10:17

AFAIK you declare how much income you brought in, and if they decide to check up on you, you have to be able to prove it.

my accountant doesn't ask for my bank statments - he just asks me for how much income I bring in, and tells me to keep the bank statements just in case. I'm presuming its the same if you do your own return as the accountant is acting as your agent. I wasn't aware that if you do your own return you have to send in any bank statements - have you had to do this ?
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Postby billy » Wed 26 Sep 2007 10:29

Yes I always give my statements to prove the remitted amount.

By capital remitance:

Say I have a termdeposit account outside of Malta and at the beginning of the year from the 100 euros capital I transfer 20 Euros while my interest was 4 euros giving a new balance of 84 euros. Is 4 euros from the 20 euros interest or capital?
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Postby gozomark » Wed 26 Sep 2007 10:45

its only income if you received it the same calendar year as the transfer, and if the interest was paid before the transfer

eg

interest paid March 2007, transfer June 2007, then 16 capital, 4 income
interest paid Nov 2006, transfer June 2007, then 20 capital
interest paid July 2007, transfer June 2007, then 20 capital

this is my understanding

also, I believe its the point to convert the Euros into MTL that counts, not the date you transfer the euros into Malta - OK so irrelevant next year, but not if you bring in currency other than euros (eg £)
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Postby Mr Kriss » Wed 26 Sep 2007 10:58

Just to complicate that a little more.......

I pay my Malta bills direct from my off shore account, so they don't appear on my bank statements, and I also draw day to day cash with a debit card on my off shore account.

I only use my local current account for direct debit for my mobile phone, and for very occasional cheques. If they want to tax me on the basis of my bank account I am more than happy.

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Postby gozomark » Wed 26 Sep 2007 11:14

[quote="billy"]Yes I always give my statements to prove the remitted amount. [quote]

but is that by choice, or because you are requested to do so ?
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Postby gozomark » Wed 26 Sep 2007 11:16

Mr Kriss wrote:Just to complicate that a little more.......

I pay my Malta bills direct from my off shore account, so they don't appear on my bank statements, and I also draw day to day cash with a debit card on my off shore account.

I only use my local current account for direct debit for my mobile phone, and for very occasional cheques. If they want to tax me on the basis of my bank account I am more than happy.

Mr K


alot of foreigners do something similar, and its not clear whether this should officially be declared or not, but I don't know anyone who does declare it - probably the cash withdrawal should
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Postby Mr Kriss » Wed 26 Sep 2007 12:10

I believe that foreigners should also declare expenditure on a foreign credit card, but I don't know anyone who does that anywhere.

Provided of course that the card is refinanced by income and not from capital :-)

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bankstatements with tax declaration

Postby billy » Wed 26 Sep 2007 14:16

I assumed that it was normal to provide, as in any other country one has to provide the yearly bankstatements with interest income etc to the tax office. Oh I recall I was asked because of Permanent Residence and one has to sign a letter that the money wasn't taken out of the country.
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incomming money

Postby billy » Wed 26 Sep 2007 14:19

All incoming money in whatever shape or form should be declared with the Tax department. Because its considered remited to Malta.
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