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ghouldog

New member
@jackfrost Assuming you are in Malta as "economically self-sufficient", you pay your €5K in tax, have your insurance, etc. But you work remotely (running an offshore company with no business whatsoever in Malta) from home or a co-working space. Are you are breaching the rules? I understand that if you are doing business in Malta as an employee or self-employed you have to register as such (pay national insurance, etc.), but I cannot seem to find a definitive answer on working from Malta as economically self-sufficient.

Also, if you set-up a Maltese co (with offshore holding co.) can you retain the "economically self-sufficient" status? Thanks
 

TRX

Corporate Services
Mentor Group Gold
Elite Member
from Malta as economically self-sufficient.
that's interesting. I can't believe that this is accepted if you live in country X but work as " economically self-sufficient " in Malta. Objective looking at it you are doing nothing else then working from home and it change nothing to the old " offshore company" setup we all were used to for this purpose! Or what am I missing?
 

jackfrost

Entrepreneur
Economic self sufficiency has nothing to do with taxes really. This is just that you are allowed to have your residency on Malta. While you have freedom on movement in the EU there are still rules individual to each country. In Malta that is you need to provide a corresponding job, degree whatever it is and then there is the route of just handing them a bank statement with i think like 16k Eur or so + health insurance certificate and declare yourself economic self sufficient. This way you will get your residency card. Again has nothing to do with taxes but just to be able to permanently reside on Malta which is the basic requirement in general.

Working for an offshore does not change anything at all. You need to look up what foreign / local soured income is. It is not where you company is but where you butt sits and that sits on Malta so it would still be local income and be taxed at 35%.

You need a Maltese active Ltd and the foreign holding either way unless you have purely (proovable) passive income (no your no substance nevis company is not passive income) with certain ownership requirements and so on. If you only have this truely passive income then yes you would not need any Maltese company as long as you dont remit the Money to Malta. You would still pay your 5k just to not have to even declare your world wide income and just make them f*** off.
 

jackfrost

Entrepreneur
PS: for me it helped that i already had a company incorporated a couple weeks earlier (takes like 1-2 weeks) and was able to give the officer that incorporation certificate to proof i have indeed a legit interest to reside on Malta. A year+ rental contract would also do the job. I did not have an apartment at that time and just lived in Hotels.
 

ghouldog

New member
Thanks, that makes a lot of sense now. I guess if you want to do things properly (i.e. you are a " digital nomad" living and working from Malta_, you would still need to register as an employee of your Malta Co (owned by an offshore co.), pay taxes on your salary (although you could choose not to pay your salary), pay National Insurance, etc?
 

jackfrost

Entrepreneur
No you dont. You have to do private insurance anyways. But you should pay the 5k expat tax which also means you dont have to declare your word wide earnings.
 

lonizzita

New member
There's absolutely no right for my home country (Germany) to tax me once I cut all ties and live/work abroad. I made sure about that.

But once again you're talking about non-remitted income, which was never even considered to be a thing since it would be tax evasion. You clearly did not understand or read a single word @BlueMist and I tried to explain earlier.

All taxes will be regularly paid in Malta. However, to not pay taxes on the TAX REFUND (it's kind of ironic, the word even says it all) just because it is considered to be a dividend (which is absolutely nonsense, again), you will have to set up another company (Holding) which will achieve the REFUND in a TAX-FREE yet LEGAL way. I explained both legal loopholes already, one was created by the Maltese themselves and the other one is tolerated by them in any kind of way since you shouldn't have to pay taxes on a refund again. At this stage, it doesn't even matter where the funds come from, like I said, they all will be subject to taxation in Malta and therefore be legit paid in Malta. Tax evasion won't pay out in the long run, tax avoidance does since there will always be legal loopholes left to use, it just might need smaller/bigger changes to your setup from time to time.

Out of curiosity, would you mind elaborating on those special cases in which a relocated resident still was held liable to pay taxes in his or her home country? Based on EU laws and agreements, there is absolutely no right for the home country, no matter what, to still tax you if your business and centre of life is abroad. Germany, France, Italy, they can all try and they will try, but if you got your shit together, if you've done your homework, you won't have to fear anything. Upside of the EU.

So personally speaking, I've done my homework and spent weeks on reading, researching and discussing with international law firms. Have you done yours? I respect your engagement, though you're not a certified tax consultant, lawyer or accountant. Ofcourse this does not mean that you might know less than those guys I'm in touch with, however it's hard to trust your words if you didn't come all the way those firms did. ;)

Regarding the second part in which you responded to @maxmmm, you might be true. I already mentioned to be careful about using offshores in the EU from what I've learned so far, but it seems even less worth to use them in tax heavens like Malta and Cyprus anymore (Cyprus along Malta joined the ATAD last year by the way). Every European country will fall for the rules and agreements, it's just a matter of time. Regardless, there will always be completely legal loopholes until the day every European country is based on the exact same tax laws and fees. Might be a thing in the future, but there also might be another 1000 different viruses exterminating mankind before. :)

Hello Paper thanks for the thread I read your very interesting post.

Regarding the 183 days of stay in Malta, I spoke to an agent and he told me to apply for the Malta tax residency certificate.
apply once a year in Malta and prove that you have resided more than 183 days on Maltese soil, this will help you '' defend '' from your country of origin

What do you think about it? do you also know this procedure?

Also could you recommend me some reliable agents? all accountants recommend me different information

thank you
 

biz1

New member
none of these things if you are not employed / register as self sufficient

no idea about seychelles but yes you can run foreign companies but you should do so through a Maltese company that is being held by a foreign company that is tax exempt e.g. gibraltar etc. CFC rules will come into play otherwise

@jackfrost can you detail this? Malta has some CFC rules as of recently. If it's >750k€ turnover and you as Maltese resident have >50% control/ownership then it's taxed in Malta, I don't understand how this principle plays out, please feel free to share your thoughts.
 

biz1

New member
The only time i have ever heard of people being checked / encountered it myself is when you request your private tax certificate (crucial for your citizenship country). They will ask you for bank statement or credit card statement or receipts or gym membership etc to kind of proof that you are at least somewhat living on the island and spending money there.

If your country of citizenship does not ask you to provide any tax certificate from the country where you reside (e.g. Malta), will a tax certificate ever be needed?? I presume not... would a bank need it? The Maltese tax number (TIN) is on the Maltese ID card, right, that's what any bank would ask for for CRS, no need for a tax certificate.
 

Admin

Forum Moderator
Staff member
In some simple terms I still believe that Cyprus is worth to look into, if you have a good agent there you may be in good hands and can have almost all the freedom you seek, both in regards to tax but also in regards to privacy.

Above is off the record, so if you want to read you to the knowledge about Malta and Cyprus you will not understand what I mean.
 

TRX

Corporate Services
Mentor Group Gold
Elite Member
I have a gent I used for some years which work well for me and customers. 100% privacy and no problems with the provided KYC docs. He do the job for ages and we know each other so never a question is asked :)
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
@jackfrost can you detail this? Malta has some CFC rules as of recently. If it's >750k€ turnover and you as Maltese resident have >50% control/ownership then it's taxed in Malta, I don't understand how this principle plays out, please feel free to share your thoughts.

Basically Malta like some other countries has a CFC threshold. So even if your offshore company is considered a CFC in Malta it is not subject to tax as a CFC if accounting profits are less than 750,000 euros and non-trading income is no more than 75,000 euros.

So lets be clear if a company is considered a CFC then the non-distributed income of that CFC is added your tax base in Malta and you go to war with tax man over DTA's etc...lol. However most importantly the above mention threshold applies before this occurs.

Perhaps others have a different interpretation.
 

Paper Chaser

Active Member
Hello Paper thanks for the thread I read your very interesting post.

Regarding the 183 days of stay in Malta, I spoke to an agent and he told me to apply for the Malta tax residency certificate.
apply once a year in Malta and prove that you have resided more than 183 days on Maltese soil, this will help you '' defend '' from your country of origin

What do you think about it? do you also know this procedure?

Also could you recommend me some reliable agents? all accountants recommend me different information

thank you
Yes, I‘ve read and heard about that certificate many times, too. If my government is really going to annoy me, I will just go get it. ;)

Well, I just posted some experiences with internationally-based agents a couple of weeks ago, did you overlook it? I‘d highly recommend contacting all of them by yourself since every person is in a different spot and has different needs.
 

jackfrost

Entrepreneur
If your country of citizenship does not ask you to provide any tax certificate from the country where you reside (e.g. Malta), will a tax certificate ever be needed?? I presume not... would a bank need it? The Maltese tax number (TIN) is on the Maltese ID card, right, that's what any bank would ask for for CRS, no need for a tax certificate.

if they look into you in any way they will ask
In some simple terms I still believe that Cyprus is worth to look into, if you have a good agent there you may be in good hands and can have almost all the freedom you seek, both in regards to tax but also in regards to privacy.

Above is off the record, so if you want to read you to the knowledge about Malta and Cyprus you will not understand what I mean.

cyprus might also be interesting for some people because of its size, banking etc. it is definitly more expensive but still well within limits.
 

jackfrost

Entrepreneur
The CFC rules are watered down even more by the fact that they only apply if it results in less tax paid, they only work in one direction and you are getting 35% tax credits on dividends anyways which would offset local maltese taxes.

Also they get further erased by the remittance system. As long as your money does not touch malta its a different story tax wise anyways.

Also the moment you apply for the corp tax refunds this gets checked by the maltese tax agency too so they already sign off on your structure and have all the details since malta has UBO etc registers with 100% transparency.
 

biz1

New member
General Malta questions, please let me know what you think:

(1) What is Malta's definition of "manage and control" actually, do you know where in their legal code it's stated?

(2) If you are a Malta resident - that is you have the Malta ID on the basis of economic self-sufficiency and you have long vacations in Malta for say 2, 4, 90, 184 days per year such number - what if you spend the rest of the year in other countries, and while in other countries you manage and control some business and you make some income, may Malta ever make claims on such business (as CFC) or on such income (taxes)?

(3) Is the general principle that, an active action you take on Malta - such as,
* while you are on Malta you make a phone sales deal between two parties in other countries that gives you commissions, or
* you perform a consultancy service where you work for some hours while you're on Malta for a client in another country, or
* say you do something that is not work but someone just wants to pay you while you are on Malta for something that's not active work by you and you sign some agreement "I accept to receive these Euros/Yens in this business transaction" and someone pays you that to your non-Malta bank account
- is the general principle that such income is taxed in Malta at 35%, or is it only taxed if you receive the income into Malta? What kind of work and income is specifically *not* taxable in Malta? (Any reference to law greatly appreciated)

(4) The fact that you hold a Malta ID card, does that mean you're taxable on Malta? If you are less than a certain number of days on Malta per year, are you still taxable? Actually what's the criterium as a physical person to be taxable on Malta. (Any reference to law greatly appreciated)

(5) Malta has some social security fee schedules too. Do they ever apply to income you get from outside Malta?

I like to understand this so I understand exactly what a person who is a Maltese resident (holds the Malta ID) can do so that he *not* attracts surprise 35% bills from Malta's tax authority.


(Finally @jackfrost what do you mean by "they only work in one direction"?)
 

biz1

New member
The CFC rules are watered down even more by the fact that they only apply if it results in less tax paid, they only work in one direction and you are getting 35% tax credits on dividends anyways which would offset local maltese taxes.

Also they get further erased by the remittance system. As long as your money does not touch malta its a different story tax wise anyways.

Also the moment you apply for the corp tax refunds this gets checked by the maltese tax agency too so they already sign off on your structure and have all the details since malta has UBO etc registers with 100% transparency.
@jackfrost do you have any further reference to that CFC is subortinated to not-touch-Malta (remittance). This is great and like to understand how it works.
 

BlueMist

Entrepreneur
Few years back they used to give this Malta ID card to anyone, even tourists staying in the hotels, who as an address were providing their hotel address. Maybe something has changed but I would not think about this document as a residency proof.
 

biz1

New member
@BlueMist that is super interesting. What about declaring taxes because you hold a Malta ID card, Malta will expect that won't they, if you don't file a tax return they'd fine you or??
 

biz1

New member
Just curious, the Maltese consolidated accounts setup, how does it work out in practice - so you have A Ltd. and B Ltd. both on Malta, A owns B, and you own A Ltd., and you are a tax resident on Malta only. B can then conduct any business (e.g. sell consulting services, facilitate sales, whatever), and you then pay out the profits as dividends to yourself, with 5% total company tax. Are you due any other taxes on top of this in Malta e.g. personal income tax?
 
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