Malta vs Cyprus vs Estonia vs UAE paired with NHR

[lonizzita]

Basically if you want all the money in your name in your bank account go with structure one, if you don't care about having all the mney in your name in your bank account because you want to reinvest the money in other ways go with structue two.

The tax rate paid on the remitted sums should be the subject to personal income tax rates but i guess nobody will go after you if you buy groceries with a foreign card.

will the offshore company need to have offices and economic substance in that country? otherwise risk it becoming a Maltese resident company?

if one withdraws dividends from an offshore account to a non-Maltese personal account, will he only have to pay 5k? or will he have to pay additional taxes in Malta?

 

[Marzio]

will the offshore company need to have offices and economic substance in that country? otherwise risk it becoming a Maltese resident company?

The goal here is exactly to make the offshore company tax resident in Malta.

if one withdraws dividends from an offshore account to a non-Maltese personal account, will he only have to pay 5k? or will he have to pay additional taxes in Malta?

If you don't remit money to Malt then you'll only pay 5K.

 

[JimBeam]

The goal here is exactly to make the offshore company tax resident in Malta.



If you don't remit money to Malt then you'll only pay 5K.

But, will then the offshore company have to pay CIT in Malta?
Pay 5k for what (please provide more details or articles)?
Thanks

 

[Marzio]

Read both documents in this post.

Malta vs Cyprus vs Estonia vs UAE paired with NHR

Hi all I am moving to Portugal very soon under NHR (so staying in portugal for 6 months and one day) and am looking for some help wrt fiscal optimalizations. I am a software dev for a US firm and I am also a freelance consultant as secondary job, currently I have an LLC. I am looking to...

www.offshorecorptalk.com

 

[JimBeam]

I guess you refer to this document:

https://cfr.gov.mt/en/inlandrevenue/legal-technical/Documents/Guidelines%20on%20The%20Remittance%20Basis%20of%20Taxation%20for%20Individuals%20under%20the%20Income%20Tax%20Act.pdf

As far as I can see it says: "minimum 5,000" meaning that it can be more than that, but not less than 5k.

 

[Marzio]

meaning that it can be more than that

Of course it can be more than that, if you remit money to Malta you'll pay taxes on it.

5K is just a flat tax if you earn more than 35K, it's the baseline.

 

[JimBeam]

For a single person 35k/year could be enough to live on Malta for a year (5k for that tax, 15k for apartment and bills, and 15k for all other expenses) but for a a couple or a family that won't be enough so they will end up paying more tax.

What's the tax rate there?

 

[Marzio]

eah for a single person 35k could be enough to live on Malta for a year

But this is not the point.

You pay 5K if you earned 35K outside Malta.

If you earned 1Mln you still pay 5K

Then it comes the remittance part.

How much of that income will you remit to Malta?

The biggest expense is rent but after that you could use a foreign card to pay for everything else so even if using the foreign card is technically remittance, how will they know?

Malta - Individual - Taxes on personal income

Detailed description of taxes on individual income in Malta

taxsummaries.pwc.com

 

[OffshorePhantom]

The biggest expense is rent but after that you could use a foreign card to pay for everything else so even if using the foreign card is technically remittance, how will they know?

In those remittance schemes where you are taxed only on the income you remit to the country (also UK non-dom is interesting) is it better to do expenses with a foreign business company card or a personal card of a foreign bank account? Do you have CFC rules? Namely have a company offshore let's say in tax heaven like the BVI be a problem with those schemes (clearly keeping the money in the company without remitting them to yourselves or only a small portion)?

 

[clemens]

You pay 5K if you earned 35K outside Malta.

If you earned 1Mln you still pay 5K

You came down to the point. If you only do 40 - 100K euro a year you should just stay where you are unless the country is appealing for you to relocate to. But if you make a lot of Money the math made above is saying more than a hundred words.

 

[Marzio]

In those remittance schemes where you are taxed only on the income you remit to the country (also UK non-dom is interesting) is it better to do expenses with a foreign business company card or a personal card of a foreign bank account?

I tend to keep business expenses separated from personal expenses but that's a personal preference.

If you use a US LLC card to pay for groceries in Malta i don't think somebody would care.

Do you have CFC rules?

It's not a foreign company, it's a Maltese resident company.

It's Malta that decided that company that are resident because managed from Malta but NOT DOMICILED because are not incorporated in Malta only pay taxes on the income remitted to Malta.

 

[OffshorePhantom]

I tend to keep business expenses separated from personal expenses but that's a personal preference.

If you use a US LLC card to pay for groceries in Malta i don't think somebody would care.



It's not a foreign company, it's a Maltese resident company.

It's Malta that decided that company that are resident because managed from Malta but NOT DOMICILED because are not incorporated in Malta only pay taxes on the income remitted to Malta.

Can you do the same using UK non-dom scheme or it is something peculiar to Malta only?

 

[Marzio]

is something peculiar to Malta only

Only Malta.

If you do the same in UK the foreign company resident in UK will attract UK taxation.

Uk non-dom works only for individuals that are not actively managing a company and those individuals aren't considered UK residents for DTT purposes.

 

[luap]

The biggest expense is rent but after that you could use a foreign card to pay for everything else so even if using the foreign card is technically remittance, how will they know?

I heard it's common in Malta to be able to pay ie rent etc from your foreign account to ie their Wise or Revolut account, thus not remitting anything, but having the landlord bring it into Malta - which has no negative effect on them as they only pay tax on the rent either way.

 

[Marzio]

I heard it's common in Malta to be able to pay ie rent etc from your foreign account to ie their Wise or Revolut account, thus not remitting anything.

I would still remit a little more than personal allowance which for a single person is something like 9K and pay very minimal taxes just to prove that i'm doing things by the book.

Not remitting anything is not credible.

 

[JimBeam]

You pay 5K if you earned 35K outside Malta.

If you earned 1Mln you still pay 5K

Then it comes the remittance part.

How much of that income will you remit to Malta?

The biggest expense is rent but after that you could use a foreign card to pay for everything else so even if using the foreign card is technically remittance, how will they know?

Understood.
Does remitted means transferred from your business account to Maltese personal bank account in form of dividends or salaries?
Or even from your personal account abroad to your Maltese bank account (just transferring your own money to Malta)?
Using a foreign issued card is an option but I guess you shouldn't "over do it"

It's not a foreign company, it's a Maltese resident company.

It's Malta that decided that company that are resident because managed from Malta but NOT DOMICILED because are not incorporated in Malta only pay taxes on the income remitted to Malta.

Will this work with Dubai Free Zone company as well?

Uk non-dom works only for individuals that are not actively managing a company and those individuals aren't considered UK residents for DTT purposes.

So, in Malta it can also work for persons actively managing a company (director/ubo) ?

I heard it's common in Malta to be able to pay ie rent etc from your foreign account to ie their Wise or Revolut account, thus not remitting anything, but having the landlord bring it into Malta - which has no negative effect on them as they only pay tax on the rent either way.

I would never think of that LOL

I would still remit a little more than personal allowance which for a single person is something like 9K and pay very minimal taxes just to prove that i'm doing things by the book.

Not remitting anything is not credible.

Clearly you should remit at least 45-50k/year.
I've taken a look at that PWC page and not sure how to figure this out.
So for the first 35k you pay 5k. How much you would pay for next 10k?

 

[Marzio]

Understood.
Does remitted means transferred from your business account to Maltese personal bank account in form of dividends or salaries?
Or even from your personal account abroad to your Maltese bank account (just transferring your own money to Malta)?
Using a foreign issued card is an option but I guess you shouldn't "over do it

Any money transferred to a Maltese bank account is the main form of remittance.

Other forms of remittance like withdrawal from foreign bank account using ATM in Malta and paying with foreign card are more difficult to track.

Will this work with Dubai Free Zone company as well?

I don't know why would anybody would do that since a freezone is already tax free.

So, in Malta it can also work for persons actively managing a company (director/ubo) ?

Yes, it works if management is done from Malta.

Clearly you should remit at least 45-50k/year.

There's no obligation to do that but if your lifestyle requires 50K / year then yes

 

[JimBeam]

Any money transferred to a Maltese bank account is the main form of remittance.

Other forms of remittance like withdrawal from foreign bank account using ATM in Malta and paying with foreign card are more difficult to track.

Makes sense.
But just wanted to double check

I don't know why would anybody would do that since a freezone is already tax free.

In case you don't want to live in UAE and be closer to Europe, and still have a legal way of not paying crazy amount of taxes.

Yes, it works if management is done from Malta.

How will this be determined if you work online?

There's no obligation to do that but if your lifestyle requires 50K / year then yes

Let's say you do.
How much taxes will you pay on extra 10k?

This article is nicely written (easy to understand):

Malta: tax and residency requirements (2023)

Malta, a former colony of the United Kingdom, has retained the Anglo-Saxon legal tradition and bureaucratic agility. The Maltese rulers are aware of their limitations in terms of economic development (small size, aging population, dependence on the tertiary sector), so for years they have been...

www.relocateandsave.org

This is very interesting:

Income earned prior to acquiring tax residency in Malta can be remitted to the territory without being subject to tax.

This means that the individual’s initial foreign capital is not covered by such legislation and can therefore be remitted to Malta without being taxed.

So on arrival you could move larger chunk of money and later import just 35k year and pay 5k/year and that's it.

 

[Marzio]

How will this be determined if you work online?

If the UAE company has only one director and director spends 183+ days in Malta i guess the company is considered managed from Malta so it would be deemed tax resident in Malta but you have to double check this because UAE has peculiar DTT

How much taxes will you pay on extra 10k?

It would be taxed according to personal income tax rate

Malta - Individual - Taxes on personal income

Detailed description of taxes on individual income in Malta

taxsummaries.pwc.com

 

[lonizzita]

If the UAE company has only one director and director spends 183+ days in Malta i guess the company is considered managed from Malta so it would be deemed tax resident in Malta but you have to double check this because UAE has peculiar DTT



It would be taxed according to personal income tax rate

Malta - Individual - Taxes on personal income

Detailed description of taxes on individual income in Malta

taxsummaries.pwc.com

if one works online and I am the sole director (I have no offices and employees) of an LLC Delaware or with a NEVIS.

Again will everything be tax free if I don't remit anything to Malta?