Individuals are considered as a tax resident of Cyprus if they spend more than 183 days per annum in Cyprus. Tax residents are taxed on all chargeable income that is accrued or derived from any source in Cyprus and abroad. Non-tax residents are only taxed on certain income accrued or derived from a source in Cyprus. Any foreign taxes that are paid can be credited against personal income tax liability.
Personal tax on income generated in Cyprus is taxed at progressive rates up to 35%. Tax varies according to the individual’s tax status. Immovable Property Tax is levied at 0.06-0.19 per thousand, which is imposed on the value of the property in 1980, payable on 30 September each year. This amount is calculated per owner, not per property, to both legal and physical residents. The corporate tax rate is 12.5%. VAT of 19% is imposed on the supply of goods and delivery of services in Cyprus, including the acquisition of goods from the European Union and the importation of goods into Cyprus.
Individuals who are resident and domiciled in Malta pay income tax on their worldwide income. Personal income is taxed at progressive rates up to 35%. However, individuals who are resident but not domiciled in Malta pay tax on (a) income arising in Malta and (b) on income (excluding capital gains) remitted to Malta that arises outside the island (i.e. ‘remittance basis’). The tax rate varies in accordance with the individual’s tax status.
The acquisition of Maltese citizenship under the Individual Investor Program does not, in itself, trigger tax residency, but even if one decides to move and take up permanent residence in Malta, one would normally still retain the status of a non-domiciled person.
Malta does not impose estate or gift tax but does levy a Capital Gains Tax (CGT) on various assets (mainly immovable property and shares). CGT is not levied on transfer of immovable property if the person transferring the property has owned it and occupied it as his main residence for a period of three consecutive years immediately preceding the date of transfer and if the property is transferred within 12 months from vacating the premises. Otherwise, tax may be levied at up to 35% on the gain if the property is sold within the first 12 years of ownership or 12% on the sales consideration if the transfer is made after 12 years of ownership. The 12% final tax, however, does not apply if the individual property owner is not resident in Malta.
The standard VAT rate is 18%. The corporate tax rate is 35%; special tax concessions, however, apply for non-resident/ non-domiciled owners.
Malta has concluded double taxation treaties with around 60 countries. A number of other agreements are signed but not yet in force.
Personal taxation for non-residents on Portuguese sourced employment and pension income is charged at a preferential rate of 25%, although interest and rental income, dividends and capital gains are taxed at 28%.
For new residents wanting to stay for longer periods and possibly reside in Portugal, there is a Non-Habitual Residents (NHR) regime which may be more beneficial. Once NHR tax status is obtained, income derived from a Portuguese source through a number of defined, high-value professions will be subject to income tax at a flat rate of 20%, though some surcharges may apply.
Income derived from a foreign source and relating to employment income, pension income and business and professional income can be subject to exemption. Portugal does not apply a wealth tax. There is no tax on gifts or inheritances between parents, children and grandchildren.
*(Currency is the Eastern Caribbean dollar (EC$), which is pegged to the US$ at 2.70 EC$/US$1.)