If you’re a British national living or working in Malta, or a Maltese resident with employment income from the UK, it’s essential to understand how your income is taxed under the Double Taxation Agreement (DTA) between the two countries, especially the key provisions of Article 16, which deals with employment income taxation across borders.
Since Brexit, UK nationals are now classified as Ressortissants de pays tiers (RPT) in Malta, meaning they must meet additional residence and work permit requirements. However, this change in immigration status does not affect the application of the UK–Malta DTA. Article 16 of the agreement continues to govern how employment income is taxed, ensuring protections against double taxation remain in place.
The Conditions You Must Meet Under Article 16
Article 16 states that employment income is taxed only in your country of residence, Malta or the UK – if all three of the following conditions are met:
First, you must spend 183 days or less in the other country during the tax year. This total includes both workdays and non-working days like weekends and holidays.
Second, your employer must not be a resident of the country where you’re working temporarily. For example, if you’re sent from a UK-based company to work in Malta for a short-term project, this condition applies.
Third, your salary must not be paid by or on behalf of a permanent establishment (PE) in the country where you’re working. A PE means a fixed business presence, like a local office or branch. If your employer doesn’t have this setup in Malta or the UK, you meet this condition.
Meeting all three conditions means your income stays taxed in your country of residence, with no additional liability abroad. You can read the full legal wording of Article 16 in the UK–Malta Double Taxation Relief Order (Legal Notice 123.35)
When You May Be Taxed in Both Countries?
If any of the three conditions outlined earlier are not met, your employment income becomes taxable in the country where you physically perform the work. This typically applies if you spend more than 183 days in the host country, your employer is resident there, or your salary is connected to a local branch or permanent establishment. In such cases, you may be taxed in both countries, but double taxation is avoided through tax relief mechanisms.
Depending on your situation, you’ll need to claim this relief from the tax authority in your country of residence. For example, if you work in Malta and are a UK resident, you may need to claim relief through HMRC. Conversely, if you’re a Maltese resident working in the UK, you’ll apply for relief via the Commissioner for Revenue in Malta. Most commonly, this is done through foreign tax credit relief, which allows you to offset tax paid in one country against your liability in the other. Keeping accurate records and seeking guidance when needed will help ensure you claim this relief correctly and avoid paying more tax than required.
Procédure amiable : Votre guide pour l'allègement fiscal transfrontalier
Special Rule for International Transport Workers
If you’re employed on ships or aircraft operating in international traffic, Article 16 offers a clear exemption:
▶️ Your employment income is taxable only in your country of residence, regardless of how many days you work abroad.
This applies to flight crew, ferry staff, and cruise ship workers based in either Malta or the UK.
Key Scenarios for British and Maltese Employees
| Situation | Taxation Rule |
|---|---|
| A British national works in Malta for 4 months (less than 183 days) on a UK payroll, with no Maltese PE | Taxed only in the UK |
| A Maltese resident takes a 6-month contract in the UK with a UK employer | Taxed in the UK, with relief claimable in Malta |
| A UK worker is seconded to a Maltese subsidiary company for 1 year | Taxed in Malta, with tax credit available in the UK |
| A Maltese pilot works on a UK-based airline operating across Europe | Taxed only in Malta, assuming Malta is the tax residence |
Réflexions finales
Article 16 of the UK–Malta Double Taxation Agreement is designed to simplify taxation for international employees. If you’re working temporarily in the other country, it’s often possible to stay taxed only at home – provided you meet specific conditions.
For longer stays, local employment, or when linked to a permanent establishment, you’ll likely be taxed where you work, but relief is available, and double taxation can still be avoided.
Besoin d'aide ?
Unsure how Article 16 applies to your situation? Our team at Expatax Malte offers personalised consultations on UK–Malta cross-border employment and double taxation relief.
Get in touch for expert guidance.
Naturally, things aren’t quite as simple as they sound – this is tax, after all.
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