6.1. Domicile and Residency Requirements
Maltese law follows common law when it comes to the distinction between domicile and residence. The distinction between these two terms is important when determining the taxation of individual taxpayers.
The term domicile is not defined under Maltese law, but it adheres to the same principles as in English law. An individual is not considered to have a Maltese domicile if, broadly speaking, that person is not of Maltese origin (parents are not Maltese and not born in Malta) and does not intend to permanently live in Malta (i.e., forever).
The following are some of the aspects that may have a significant impact on the domicile of an individual:
- the individual becomes a permanent resident — this typically requires an application for a permanent residence certificate which can only be requested after spending five years in Malta;
- the individual becomes a long-term resident — this typically requires an application for long-term residence status which can only be requested after spending five years in Malta;
- the individual marries a Maltese-domiciled person; and
- the individual changes his/her intention to return to their home country with an intention to remain in Malta permanently.
The definition of residence under the Income Tax Act is rather vague and ultimately leaves the determination of residence to the Commissioner for Revenue.
An individual that has the intention to become a resident of Malta may register as a resident for tax purposes with effect from the first day.
An individual who does not have the intention of becoming a resident of Malta will become a resident if he or she spends more than 183 days there within a calendar year.
When applying for a tax residency certificate, the Commissioner for Revenue will carry out its own review and determination by requesting either proof that the taxpayer spent more than 183 days within a calendar year in Malta or evidence to support the individual’s intent to reside in Malta. The following are some of the criteria that are taken into consideration when determining an intent to reside in Malta:
- number of days physically present in Malta;
- regularity and frequency of visits to Malta;
- business, investments and family ties in Malta; and
- the nature of the individual’s visits to Malta.