Malta - Remittance Basis of Taxation as a Trader vs. Corporate Structure

[Topdev]

Isn't this the real point though?

If we were talking non-crypto for UK non-dom, Thailand or Georgia then the whole point is that offshore capital gains are not taxed but business activity is. The same asset class could be classed as income or capital gains, depending on some quite woolly interpretations. The simple answer is that passive income doesn't arise locally, but trading income does if the work was done locally. The complex problem is whether it was trading income or capital gain. Thailand cleared it up by claiming that al crypto are local (ugh), Georgia seems to have decided that all crypto is foreign (but are we 100% sure?), and UK have decided that the location follows the location of the owner (even if in a transparent fund...which is nonsensical).

I do not know how these things are interpreted for crypto in Cyprus or Malta; I am intrigued. Right now I am skeptical that active trading in Malta causes profits to arise outside of Malta. The KPMG doc seems to imply the opposite but Google doesn't seem to provide a lot of trustworthy references for this question.

If you can really trade unlimited amounts of crypto from Malta as a natural person on offshore exchanges with any frequency and have it deemed offshore by the Commission For Revenue, then book me a flight right now. I love Malta!

Must be the reason why I am over hearing many crypto related conversation lately while at the beach. I know its not polite but the words "bitcoin" and "bull run" get my attention.

As a resident I have never paid any taxes on crypto so far because enforcement is lax, but I was told by a reliable source that the tax authorities will start asking for transaction from crypto exchanges from next year.

to be honest its not clear even to me the tax rate here if you art trading in person. According to the KPMG website its regarded as capital gains tax and taxed at 35% which is very high. non residents have slightly different rules.

 

[carz]

As a resident I have never paid any taxes on crypto so far because enforcement is lax, but I was told by a reliable source that the tax authorities will start asking for transaction from crypto exchanges from next year

This is interesting, did s/he specify how they would do this?

(I guess crs is going to include crypto, so all tax authorities would get such information).

 

[Rzeznik]

“Any trading income that is made while one is residing physically in Malta is considered as income arising in Malta and taxable in Malta.”

That is true for Malta but to be fair not only for Malta.
If we look on other crypto "tax free" EU countries:
In Slovenia you can not trade more like 100days a year.
Even in Portugal if you are trading you can get into troubles if trading is your "profession/business" most income goes from it.
Germany no tax after 1 year of holding or 10 years if crypro was used to stacking.
In Malta they wrote that they won't tax if your crypto holding were long term investments not considered as trading.
If you want do actively trading in Malta to be clear you should have some company CFC rules are very relaxed in Malta comparing to others.
(I will have to examine those but since they have non-dom rules getting any company for trading will rules)

In every country I see different practice vs law.
In reality my friend who got Malta residency in 2018 he even not payed them those 5k Euro while he had more $$$ than 35k.
Reality is that Malta have like 400k people, tax office is not that big if they see "ordinary resident" paid 5k tax over 35k income outside Malta there is like 0.01% chance that they will audit you for me.
Of course don't demand officials to write you that in plain text, because they have to protect tax treaties and their taxes.
I was using law firm and as far if someone paid 5k Euro then never got audited so far... that is the reality.
If you want to be 100% complaint with law you have to setup some company to trading but that one can be even in tax heaven if you are in Malta.

PS: Tax heaven is not good for stock/bonds because of withholding tax and no tax treaties.