Malta: trading income = foreign-sourced income?

canats123 · Feb 13, 2012, 4:55pm

Quote:

Originally Posted by soldintime

The same rules do not apply to Malta. But good to find an official answer if you will find one. Check out the british expat forum for Malta. There is a guy called gozomark who has been living for 10 years in Gozo. I believe he uses a top accounting firm in Malta to provide the answer and he has been living tax free for years.

Wow! that's nice then. Is such rule being applied to Malta? I will check for that.

Thanks for your info!

davissjeffer · Feb 28, 2012, 12:43am

The site was very interesting. Malta has always had a full imputation system of taxation, and therefore tax paid by a company is credited in full to the share holder upon the payment of a dividend. The company tax rate is 35% and is equal to the minimum rate of personal tax in Malta. It consists of three categories of distributed reserves as Maltese taxed account, Maltese untaxed account and foreign income account.

Maverick2608 · Mar 1, 2012, 4:20am

I finally received the answer from the Malta Inland Revenue Department:
“Any trading income that is made while one is residing physically in Malta is considered as income arising in Malta and taxable in Malta.”

Consequently, I consider the simple setup in Malta as dead.

Dozens of advisors in Malta promote the corporate setup described in this link:
Tax Refunds and Dividend Taxation in Malta -3a Malta

I may forward a question to the Inland Revenue Department to confirm whether this setup is indeed legal.

However, I prefer a simple setup in order to lower the risk of getting caught by legal fine print/details and to avoid too much dependence on legal advisors.

For that reason at the moment I prefer Andorra or Dubai as these locations involve no income tax and thus present a clean and simple setup.

China Diapers · Mar 1, 2012, 4:25am

You don't get pastizzi in dubai and andorra

Roco · Apr 2, 2012, 2:55pm

Hi :

Finally
Do you have any news about 3aMalta)
¿What did you do ?

Andorra has new Legislation and i am not sure trading is considered self-employment.
Dubai?

I am looking for a new country for trade for a living but only LEGAL structures.

Thanks in advance

Maverick2608 · Apr 3, 2012, 5:52am

Quote:

Originally Posted by Roco

Hi :

Do you have any news about 3aMalta)
¿What did you do ?

Andorra has new Legislation and i am not sure trading is considered self-employment.
Dubai?

Hi Roco,
I put Malta on hold because of the pressure for a Eurozone financial transaction tax, although recent news suggests it has now been shelved. I still put Malta on hold because I want to avoid being dependent on advisors charging for complicated schemes whose legality I still need to confirm. Also, “soldintime” lived there for three years and got tired of living on an Island.

It is correct that Andorra has new legislation. However, the new legislation involves a corporate tax rate on non-resident legal entities and VAT. There still is no income tax on residents. It is correct that it is being debated whether to introduce an income tax on residents, but currently there is none.

Dubai is wonderful. However, the long flight is a drawback.

Dareplicant · Jun 19, 2012, 7:59am

Quote:

Originally Posted by Maverick2608

Hi Soldintime,

Thank you so much for your answer.

I have been interested in moving to Malta with my wife, but thanks to your posts and the specter of the EU financial transaction tax I am now looking into Andorra instead. I am Scandinavian and have lived 3 years in New York.

However, in order to fully understand the Maltese system, I will ask the tax authorities in Malta directly whether I can apply the remittance basis on trading income from abroad?

The reason I am in doubt is because I hired a tax consultant who told me that in the UK (non-domiciled) I would not be allowed to use the remittance basis on trading income from abroad because the UK tax authorities perceive the source of trading income to be the UK when I am physically located in the UK while trading irrespective of whether you use an online US broker and trading only US-listed securities.

The tax consultant claimed that he had seen a legal opinion on the issue from one of the big legal firms in London. Due to the close ties between Malta and the UK he believed that the practice in Malta would be the same, although he was not completely sure because he had not seen a legal opinion on the issue from Malta.

I will provide the answer from the Maltese authorities here when I receive it.

Thank you.

Sincerely,
Maverick

You can always move to Barcelona and trade from Andorra with a local broker, very close by.

soldintime · Jun 19, 2012, 9:18am

Quote:

Originally Posted by Dareplicant

You can always move to Barcelona and trade from Andorra with a local broker, very close by.

That would be a 2 and half hour drive each way. Get a place in 2 countries.

Feb 28, 2012, 12:43am	#18
davissjeffer New Member Member Since Feb 2012 1 Posts	Re: Malta: trading income = foreign-sourced income? The site was very interesting. Malta has always had a full imputation system of taxation, and therefore tax paid by a company is credited in full to the share holder upon the payment of a dividend. The company tax rate is 35% and is equal to the minimum rate of personal tax in Malta. It consists of three categories of distributed reserves as Maltese taxed account, Maltese untaxed account and foreign income account. __________________ payroll tax services payroll tax preparer

Mar 1, 2012, 4:20am	#19
Maverick2608 Rookie Member Member Since Jan 2012 13 Posts	Re: Malta: trading income = foreign-sourced income? I finally received the answer from the Malta Inland Revenue Department: “Any trading income that is made while one is residing physically in Malta is considered as income arising in Malta and taxable in Malta.” Consequently, I consider the simple setup in Malta as dead. Dozens of advisors in Malta promote the corporate setup described in this link: Tax Refunds and Dividend Taxation in Malta -3a Malta I may forward a question to the Inland Revenue Department to confirm whether this setup is indeed legal. However, I prefer a simple setup in order to lower the risk of getting caught by legal fine print/details and to avoid too much dependence on legal advisors. For that reason at the moment I prefer Andorra or Dubai as these locations involve no income tax and thus present a clean and simple setup.

Mar 1, 2012, 4:25am	#20
China Diapers Veteran Member Member Since Jan 2009 492 Posts	Re: Malta: trading income = foreign-sourced income? You don't get pastizzi in dubai and andorra

Apr 2, 2012, 2:55pm	#21
Roco New Member Member Since Feb 2012 4 Posts	Re: Malta: trading income = foreign-sourced income? Hi : Finally Do you have any news about 3aMalta) ¿What did you do ? Andorra has new Legislation and i am not sure trading is considered self-employment. Dubai? I am looking for a new country for trade for a living but only LEGAL structures. Thanks in advance

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