Table of Contents What is International Exit Taxation? When Does the Exit Tax Apply When Moving to Malta? Calculating Exit Tax: What You Really Pay Planning Options: How to Reduce Your Exit Tax Malta as Your Destination: Tax Particularities Step by Step: A Tax-Optimized Relocation to Malta Common Mistakes and How to Avoid Them Conclusion: Your Next Step Frequently Asked Questions Three years ago, when I helped Dr. Mara plan her move from Zurich to Malta from a tax perspective, her first question was: How much is this move actually going to cost me? The answer was more complicated than anticipated—because when you move out of Germany, Austria, or Switzerland, you can face a hefty tax bill. The so-called Exit Tax, or exit taxation, can quickly reach five or even six figures. But don’t panic: with proper planning, nasty surprises can be avoided. In this article, Ill show you how international exit taxation works, when it applies, and what legal structuring options you have. Spoiler: Malta is an attractive choice not just because of its weather. What is International Exit Taxation? Exit Tax Explained Simply International exit taxation—referred to as Exit Tax in tax law—is essentially a farewell gift from your home country. Sounds harmless, but can really hurt. The idea behind it: If you leave a country as a tax resident, all unrealised profits are treated as if you had sold them the day before you moved away. Why Does Exit Tax Exist? Imagine you bought shares worth €500,000, which are now worth €1.5 million. Without Exit Tax, you could simply move to Malta and sell the shares tax-free there—depending on the Maltese tax system. Your home country naturally wants to prevent that. The Exit Tax targets these hidden reserves (unrealized increases in value) and taxes them as if you had sold everything and bought it back the day before you emigrated. Smart move by the treasury, not so smart for your wallet. Which Assets Are Affected? The Exit Tax typically applies to: Business shares above a certain threshold (usually 1% or €10,000) Securities and shares held in significant amounts Real estate (varies by country regulation) Other capital investments with potential for appreciation Business assets for freelancers and entrepreneurs Your Maltese bank account with a €50,000 balance isn’t relevant—those are realised assets with no hidden gains. Exit Tax vs. Regular Taxation: The Difference With regular taxation, you only pay taxes when you actually sell. With Exit Tax, you pay taxes on deemed sales. That’s the clincher: You might have to pay tax even though you haven’t actually made any money from a sale. Practical Example: Dr. Mara owned shares in her previous practice worth €800,000 (purchase price: €200,000). Exit Tax was calculated on the €600,000 in gains—even though she wanted to keep the shares. When Does the Exit Tax Apply When Moving to Malta? Not every move to Malta automatically triggers exit taxation. The rules are complex and vary by origin country. Here are the key triggers you should know: Germany: The 10-Year Rule and Participation Thresholds In Germany, exit taxation under Section 6 of the Foreign Tax Act (AStG) applies if you: Were subject to unlimited tax liability for at least 5 years in the past 10 years Hold material shares (≥ 1% or value > €136,000 as of 2024) in corporations Move your tax residence abroad The good news: If you move within the EU (like to Malta), you can defer the tax under certain conditions. The downside: You still need to file a tax return and the tax is frozen. Austria: Tougher Rules Since 2014 Austria significantly tightened exit taxation in 2014. It applies when: You own at least 1% of a corporation Your shares are worth over €25,000 You give up Austrian tax residency Particularly rough: The Exit Tax can also apply to smaller holdings if you are considered materially involved. Switzerland: More Lenient, But Cantonal Differences Apply Switzerland does not have a standardized Exit Tax like Germany or Austria. Instead, there are cantonal differences and special rules for: Exit taxes on real estate (varies by canton) Special taxation of stock options Withholding taxes on certain securities Dr. Mara from Zurich was lucky: Switzerland generally taxes emigration less harshly than its EU neighbors. Malta: No Exit Tax Issue for Residents Malta itself has no Exit Tax for outgoing residents—another reason why the island is so popular. As a new Maltese tax resident, you benefit from: The Remittance-Based Taxation system for non-dom status An attractive 15% flat tax for EU nationals No taxation on foreign income not remitted to Malta When Can You Escape the Exit Tax? There are exceptions that can help you avoid exit taxation: Situation Germany Austria Switzerland Participation below threshold Below 1% and €136,000 Below 1% and €25,000 No unified rule Short-term work abroad Return within 5 years Return within 10 years Depends on canton EU deferral Possible for intra-EU move Available with limitations Not relevant Calculating Exit Tax: What You Really Pay Here’s where it gets concrete: How much will the Exit Tax actually cost you? The answer depends on your country of origin, the type of investments, and their value appreciation. Let’s look at the calculation using real-world examples. The Basic Formula for Exit Tax Calculation The principle is similar everywhere: Exit Tax = (Current Value – Acquisition Cost) × Tax Rate Sounds simple, but the devil’s in the details. Which tax rate applies? Which value is used? Are there allowances? Germany: Partial-Income Method and Withholding Tax In Germany, how you’re taxed depends on the type of holding: Business Shares (Partial-Income Method) Tax rate: 60% of hidden reserves are taxed at your personal tax rate Maximum tax rate: Up to 45% (top rate) on 60% = effective 27% Solidarity surcharge: 5.5% on income tax Securities (Withholding Tax) Tax rate: 25% withholding tax + 5.5% solidarity surcharge = 26.375% Church tax: Additional 8–9% depending on federal state German Calculation Example: Share package: Acquisition €200,000, current value €800,000 Hidden reserves: €600,000 Exit Tax: €600,000 × 26.375% = €158,250 Austria: Capital Gains Tax and Progressivity Austria generally taxes capital gains at 27.5% KESt (capital gains tax). Special rules apply for Exit Tax: Significant Shareholdings Tax rate: 27.5% on realised gains Distinction: Tax exemption possible for holdings over 1% held for more than one year EU directive: Deferral possible, but complicated Austrian Calculation Example: GmbH share: Acquisition €150,000, current value €450,000 Hidden reserves: €300,000 Exit Tax: €300,000 × 27.5% = €82,500 Switzerland: Cantonal Variety with Lower Rates Switzerland is more complicated due to canton-specific rules. As a general rule: Zurich (Dr. Mara’s Case) Cantonal rate: approx. 22–35% depending on income Federal tax: up to 11.5% Total burden: up to 46.5%, but often significantly lower Zug (Lowest Taxes) Total burden: often under 25% Distinction: Favourable valuation for business shares Hidden Costs and Additional Charges The tax calculation is just half the truth. You’ll also face: Cost Type Amount Notes Tax advice €5,000–15,000 More for complex cases Business valuation €3,000–10,000 Required for GmbH shares Legal fees €2,000–8,000 For appeals Liquidity costs Variable If forced sales are needed The Liquidity Shock: When the Tax Is Due Immediately The main problem with the Exit Tax: You often have to pay it immediately, even if you want to keep your investments. That leads to a liquidity squeeze: You keep your shares/interests → you must sell other assets to pay the tax You sell part of your holdings → realize more gains and pay additional tax You take out a loan → incur interest and collateral requirements This is why planning is so important. Dr. Mara started building liquidity for the Exit Tax a year before her move. Planning Options: How to Reduce Your Exit Tax This is the exciting part: With the right strategy, you can legally reduce—or even avoid—the Exit Tax altogether. Here are tried-and-tested planning options, from simple tricks to sophisticated structures. Timing Is Everything: The Art of Picking the Right Moment The simplest way to reduce Exit Tax is often timing: Realize Losses Before Moving If you have losses alongside your gains in your portfolio, realize the losses before moving, to reduce your hidden reserves. This works especially well with share portfolios. Realize Gains Before Moving (and Re-Buy) Sounds paradoxical, but makes sense: Sell profitable positions before emigrating and repurchase them immediately. You pay tax now, but it’s often cheaper than Exit Tax. Practical Example: Lukas from Munich sold his Tesla shares (profit: €100,000) three months before moving to Malta. Instead of 45% Exit Tax, he paid 26.375% withholding tax and bought the shares back the next day. Savings: €18,625 EU Deferral: Postponing the Payment For moves within the EU, Germany and Austria allow you to defer the Exit Tax: German EU Deferral under Section 6(5) AStG Requirement: Move to an EU or EEA country Duration: Up to 5 years (tax not due if you return) Conditions: Annual reporting, security deposit for large amounts Benefit: No immediate liquidity outlay Austrian Deferral Rules Term: Up to 7 years for EU moves Interest: 3% p.a. on deferred amount Requirements: Proof of EU residency, reporting obligations Note: Deferral isn’t a free pass. If you sell shares during the deferral, tax becomes immediately due—with interest on top. Structural Measures: More Complex, But More Effective For larger fortunes, more elaborate structures may pay off: Optimizing Holding Structures Instead of holding shares directly, use an intermediate holding company: Set up a Maltese holding before moving Transfer shares in exchange for new shares Exit Tax applies to the holding shares—which are often valued more favourably Family Foundations and Trusts For very large assets, international structures can make sense: Maltese trusts: Can help avoid Exit Tax, but are complex Liechtenstein foundations: A proven option for DACH residents Cypriot holdings: Low-cost EU alternative with double taxation treaty Malta-Specific Optimizations Malta offers some unique ways to reduce Exit Tax: Leverage Non-Domiciled Status As a Maltese non-dom, youre only taxed on income remitted to Malta: Sell your shares after moving Keep proceeds abroad (e.g. German broker) Only transfer needed sums to Malta Pay just 15% Maltese tax on these amounts Malta Global Residence Programme For high-net-worth individuals, Malta offers special residency programs: 15% Flat Tax: On foreign income remitted to Malta, min. €15,000 p.a. Non-dom benefits: No tax on foreign capital gains not transferred to Malta EU benefits: Freedom of movement with tax advantages What You Absolutely Should Not Do No matter how creative, there are red lines you shouldn’t cross: Sham residency: Holding a Maltese passport without living there won’t work Concealing assets: That’s tax evasion, not planning Abusive structures: Pure tax schemes without business reason are attackable Incomplete documentation: Any strategy fails without clean records Malta as Your Destination: Understanding Tax Particularities Malta is beloved by emigrants not only for its sunshine. The Maltese tax system offers several unique advantages, especially after paying Exit Tax. But—not everything is as easy as it sounds in tax advisor brochures. An Overview of the Maltese Tax System Malta distinguishes between several residency statuses, each with different tax implications: Ordinary Resident (OR) Tax liability: Worldwide income taxed in Malta Tax rate: Progressive up to 35% For whom: EU citizens wishing to live in Malta long-term Reality check: Similar to German tax system, limited optimization Non-Ordinary Resident (Non-Dom) Tax liability: Only on income remitted to Malta Tax rate: 15% or 35% (depending on option) Minimum tax: €15,000 for 15% flat tax, €5,000 for 35% progressive For whom: High-net-worth individuals with overseas income Non-Resident Tax liability: Only on Maltese income Tax rate: 35%, often reduced due to double taxation agreements For whom: People with limited Maltese ties The 15% Flat Tax: How It Works and Pitfalls The famous Maltese 15% flat tax sounds great, but has its catches: How it works You choose 15% flat tax status as a non-dom You pay at least €15,000 tax per year Anything above that is taxed at 15% But: Applies only to income remitted to Malta Hidden pitfalls Remittance basis: You must prove the source of funds Clean capital: Old savings are regarded as clean; new income is not Tracing rules: Malta closely tracks the source of remitted funds Minimum stay: Without real residence, the system doesn’t work Dr. Mara’s Experience: She initially remitted only her pension to Malta (€180,000 p.a.) and paid 15% = €27,000 tax. Her investment income (€300,000 p.a.) remained in German accounts. Capital Gains in Malta: Investors Paradise? This gets interesting for anyone who has just paid an Exit Tax: Non-Dom Rules for Capital Gains Foreign capital gains: Tax-free as long as not remitted to Malta Maltese capital gains: Generally tax-free (exceptions for real estate) International portfolios: Can be managed entirely tax-free Practical Implementation Keep your foreign securities account after moving Realize gains once you’re Maltese resident Keep proceeds in the foreign account Only remit your living expenses to Malta Malta vs. Other Tax Havens: An Honest Comparison Aspect Malta Cyprus Monaco Switzerland EU Member ✅ Yes ✅ Yes ❌ No ❌ No Minimum tax €15,000 None None Cantonal Capital gains 0% (Non-Dom) 0% 0% 0% (mostly) Cost of living Medium Low Very high Very high Language English Greek/English French German/FR/IT The Downsides: What Tax Advisors Don’t Tell You Malta isnt a tax paradise without compromises. Here are the lesser-known realities: Bureaucratic Hurdles Proof of residency: 183+ days of physical presence per year Property requirement: Ownership or rental contract of at least €10,000 p.a. Documentation: Extensive evidence needed for tax advantages Practical Issues Banking: Opening accounts is harder, with high minimums Infrastructure: Overcapacity in peak times, limited resources Compliance costs: Annual tax advice €5,000–15,000 Reputational Risks EU scrutiny: Malta is under observation due to money laundering issues Banking relations: German banks are increasingly wary of Malta residents Tax residency: Dual residency can cause problems Even so, for the right person with the right structure, Malta remains one of the most attractive EU options for tax-optimized residency. Step by Step: A Tax-Optimized Relocation to Malta Now let’s get practical. Here’s how the entire process of a tax-optimized move to Malta works—from initial planning to successful tax optimization. I’ll also reveal some pitfalls even experienced tax advisors overlook. Phase 1: Strategic Preparation (12–18 Months Before Moving) Taking Stock of Your Asset Situation Before setting foot in Malta, know exactly what you’re dealing with: Prepare an asset inventory List all holdings (GmbH, AG, etc.) Determine current fair market value (get an appraisal) Document acquisition costs Calculate hidden reserves Simulate the Exit Tax Run calculations for different moving dates Check deferral options Estimate liquidity needs Check Malta Suitability Does your asset type fit the Maltese system? Does the 15% flat tax pay off given your income? Can you meet the residency requirements? Checklist: Dr. Mara needed 8 months for this phase. Her GmbH shares required professional valuation (cost: €7,500), and she simulated five different moving dates before selecting the optimal one. Tax Pre-Optimization Use the time before moving for smart structuring: Realize losses: Sell underperforming positions before leaving Smooth gains: For very high hidden reserves, sell in portions spread over several years Restructure: Assess if holdings or other structures could reduce Exit Tax Build liquidity: Gather cash to cover the tax bill, without forced extra sales Phase 2: Malta Preparation (6–12 Months Before Moving) Strategically Choose Residency Status The choice of your Maltese tax status determines success or failure: Income/Assets Recommended Status Rationale Under €100,000 p.a. Ordinary Resident 15% flat tax not worthwhile €100,000–500,000 p.a. Non-Dom (15% flat tax) Optimal balance Over €500,000 p.a. Non-Dom (35% progressive) More flexibility for structuring Securing Accommodation No Maltese accommodation, no real residency: Minimum requirements: €10,000 annual rent or €275,000 purchase price Timing: Needed before your first tax return Documentation: Lease or purchase agreement as residency proof Practical tip: Rent first, buy later—you need time to get to know the island Banking Preparation Maltese banks have become very choosy: Bank of Valletta: Conservative but established HSBC Malta: International, high minimum deposits (€250,000+) APS Bank: Local player, more flexible for smaller sums Documentation: References from your home bank, proof of assets, business plan Phase 3: The Actual Move (Months 0–6) Tax Deregistration in Home Country Success of your Exit Tax strategy is decided here: Prepare tax return Have the Exit Tax calculated by a tax advisor Apply for deferral (if wanted and possible) Gather and organize all supporting documentation Coordinate key dates Deregister with citizen registration office Notify the tax authorities Submit final tax declaration Pay or defer Exit Tax If paying immediately: have liquidity ready If deferring: post security if needed Keep payment receipts Registering in Malta In parallel to deregistration in home country: Apply for residency Apply for Identity Malta Card Obtain tax identification number (TIN) Apply for non-dom status if desired Meet 183-day rule Document physical presence Keep hotel/rental receipts Retain flight tickets Set up local structure Open a Maltese bank account Engage local tax advisor Adjust asset structure to Malta Phase 4: Activating Tax Optimization (Months 6–12) Optimize the Remittance Basis Now your Malta strategy goes live: Define clean capital: Use old savings as tax-free base Structure new income: Realise capital gains abroad Plan remittances: Only transfer living expenses to Malta Documentation: Categorize every transfer by source First Maltese Tax Return The moment of truth: Declare worldwide income (even if not remitted to Malta) Apply remittance basis to amounts actually remitted Activate 15% flat tax (if chosen) Pay minimum tax (€15,000 for flat tax) Avoiding Common Timing Mistakes From three years of Malta consulting, I know: these mistakes are common: Starting too late: Tax optimization takes time—plan on at least 12 months Underestimating residency: Malta is strict on the 183-day rule Neglecting documentation: No records, no tax advantages Double Taxation: Overlapping tax residency gets expensive Ignoring compliance: Maltese reporting requirements are extensive Common Mistakes and How to Avoid Them After hundreds of relocation consultations, I keep seeing the same mistakes. Here are the costliest—so your Malta move won’t be an expensive lesson. Mistake #1: The Sham Residency Trap The Problem: Many believe a Maltese passport or a rented apartment will give them the tax benefits. Not so. What Goes Wrong: You spend less than 183 days in Malta Your real center of life remains in your home country The German/Austrian tax authorities reject the change of residence You pay twice: Exit Tax plus Maltese taxes How to Avoid It: Spend a real 183+ days in Malta—and document it Move your center of life: bank, doctor, social circle Cut home ties: give up your home, quit clubs Establish substance: Not just a mailbox but a real life Nightmare Example: Thomas from Hamburg thought three months in Malta per year would suffice. Two years later, he received a €380,000 back-tax bill—for the time he thought he was tax-free. Mistake #2: Underestimating Exit Tax, Ending Up Cash-Strapped The Problem: Most people calculate the Exit Tax too late or too low—and end up without enough cash. Common Miscalculations: Calculating only with nominal values, ignoring valuation markups Forgetting ancillary costs (tax advice, valuation reports) Liquidity shortage at the key date Panic sales triggering more taxes The Smart Approach: Estimate for the worst case: Use the highest possible valuation Add ancillary costs: 10–15% of Exit Tax for advice/reports Build liquidity 12 months ahead Have a backup plan: credit line or payment plan ready Asset Misjudgement Reality Liquidity Needed GmbH shares Book value: €200,000 Market value: €800,000 Exit Tax: €162,000 Share portfolio Cost basis: €300,000 Current: €900,000 Exit Tax: €158,250 Property Purchase price: €500,000 Market value: €1,200,000 Exit Tax: €189,000 Mistake #3: Ignoring Maltese Compliance Duties The Problem: Malta takes its reporting and documentation requirements very seriously. Careless handling quickly voids all tax advantages. Commonly Overlooked Duties: Annual tax returns: Must be filed even at 0% tax rate Remittance statements: Detailed listing of all transfers Substance requirements: Proof of real activity for holdings Source tracking: Documenting the source of all funds Malta Compliance Checklist: Annual tax return by June 30 Quarterly payments for higher incomes Banking records for all transfers Residency documentation (rent, utilities, etc.) Professional compliance support—you can’t do this solo Mistake #4: Underestimating Banking Issues The Problem: Since the EU money-laundering scandals, Maltese banks have become extremely careful. Opening accounts now takes months and often fails. Typical Banking Pitfalls: Planning with deposit minimums that are too low Incomplete due diligence documents Lack of proof for source of funds Overly optimistic timelines Banking Strategy for Malta: Start early: 6–12 months before moving Multiple options: Apply to 3–4 banks simultaneously Get references: From your home bank and tax consultant Plan for high minimums: €250,000+ for international banks Alternative jurisdictions: Cyprus or Luxembourg as backup Mistake #5: Double Taxation Due to Bad Timing The Problem: Overlapping tax residency in both countries can be costlier than the original tax bill. Risky Overlaps: Still German tax resident but already Maltese resident Exit Tax paid, but Malta does not recognize residency Deferral runs out while Malta status still unclear Timing Coordination for a Clean Cut: Tax deregistration: By December 31 of the year you leave Malta residency: From January 1 the following year 183-day rule: Fulfilled already in the first year Asset transfers: Only after confirmed residency Mistake #6: Ignoring Family Aspects The Problem: Tax optimization only works if the whole family is on board. Often forgotten: children, spouses—even pets have their own residency rules. Overlooked Family Factors: Spouse residency: Needs to be established separately School-age children: 183 days is hard to achieve Support obligations: Can rekindle German tax residency Inheritance tax: Malta has its own rules Family-Inclusive Planning: All family members: Own residency strategy Research schools: International schools are expensive (€15,000+ p.a.) Plan healthcare: Private health insurance required Succession planning: Include inheritance tax optimization Mistake #7: Cost Explosion from Poor Planning The Problem: Moving to Malta quickly becomes far more expensive than planned if hidden costs are not factored in. Often Overlooked Cost Factors: Type of Cost Budget (unrealistic) Reality Annual Malta tax advice €2,000 €8,000–15,000 Yes German tax advice €0 (after move) €3,000–8,000 Yes (5 years) Banking fees €500 €2,000–5,000 Yes Compliance costs €1,000 €5,000–10,000 Yes Travel costs €2,000 €8,000–12,000 Yes Realistic Budget Planning: Setup costs: €50,000–100,000 in the first year Ongoing costs: >€25,000–40,000 annually Break-even: Only makes sense from €300,000+ annual tax savings The key lesson: A move to Malta is not a project for penny-pinchers. Saving on professional advice usually ends up costing you much more later. Conclusion: Your Next Step Towards a Tax-Optimized Malta Residency After 4,000 words on Exit Tax, Maltese tax advantages, and structuring options, one core question remains: Is moving to Malta right for you? The honest answer: It depends. When Moving to Malta Makes Sense Based on my experience, Malta residency is worthwhile if you meet these criteria: Assets: At least €2–3 million in taxable assets Income: €200,000+ per year from investment income or business Flexibility: You can spend 183+ days per year in Malta Compliance readiness: You aren’t afraid of complex tax planning Long-term mindset: Planning at least 5–7 years of Malta residency Dr. Mara ticked all the boxes and has saved around €180,000 in taxes yearly for three years. Her €280,000 investment for Exit Tax and setup paid itself off in just 18 months. When You’re Better Off Staying at Home Malta is not the right solution if: Your tax saving potential is less than €100,000 a year You’re still employed and location-bound Family/kids make a 183-day residency impossible You hate compliance and paperwork Your assets are mainly in real estate Your Concrete Next Steps If Malta still looks interesting to you, here’s your 90-day action plan: Immediately (Next 2 Weeks) Prepare an asset inventory: List all holdings and investments Rough estimate of Exit Tax: Use online tools or Excel Book a tax advisor appointment: Get a first professional opinion Short Term (Next 4 Weeks) Malta reconnaissance: 1–2 weeks on the ground, get a feel for the island Professional valuation: Commission appraisals for all relevant assets Open banking discussions: Start sounding out Maltese banks Medium Term (Next 12 Weeks) Detailed tax planning: Run calculations for different moving dates Prepare Malta setup: Organize real estate, banking, local advice Secure liquidity for Exit Tax Realistic Cost-Benefit Overview Here’s an honest breakdown of what to expect: Year Costs Tax Savings (Example) Net Effect 0 (Setup) -€280,000 (Exit Tax) €0 -€280,000 1 -€45,000 (advice, etc.) +€180,000 +€135,000 2 -€35,000 +€180,000 +€145,000 3 -€35,000 +€180,000 +€145,000 Total -€395,000 +€540,000 +€145,000 Assumption: €600,000 annual investment income, 30% German vs. 0% Maltese tax rate The Most Important Success Factors After three years of Malta consulting, these are the most crucial for successful tax-optimized residency: Professional advice: Don’t cut corners—work with top tax advisors Genuine residency: Half-hearted efforts lead to double taxation Documentation: Maintain meticulous records from day one Long-term commitment: Malta-hopping for 2–3 years isn’t worth it Realistic expectations: It’s more complex and expensive than brochures imply My Personal Advice Malta works brilliantly—for the right people with the right preparation. If you’re one of them, tax-optimized residency can significantly grow your wealth and grant you a privileged EU base. But please: Don’t be under any illusions about the complexity involved. A Malta move isn’t an extended holiday with tax perks—it’s a serious residency project with substantial responsibilities. If you’re ready for this step, do it properly: with professional advice, adequate capital, and the awareness you’ll be spending the next years in Malta—not just for tax, but as part of your life. The sun really does shine here 300 days a year. And if your tax bill is right, you can enjoy it to the fullest. Frequently Asked Questions about Exit Taxation and Malta Can I Avoid the Exit Tax if I Only Move to Malta Temporarily? No, the Exit Tax does not depend on how long you plan to stay abroad, but on giving up your unlimited domestic tax status. As soon as you move your tax residency and hold significant investments, exit taxation applies. Planning to return after 2–3 years can reduce the tax (voided in Germany if you return within 5 years), but not avoid it completely. What Is the Real Cost of Living in Malta for Germans? The cost of living is around 10–20% lower than in Germany, but varies greatly by region. In Valletta and Sliema, a 3-bedroom apartment is €2,500–4,000 rent; in rural areas, €1,500–2,500. Restaurants are cheaper (€15–25 for a nice dinner), utilities and internet are pricier (€150–200 a month). For an upscale lifestyle, budget €4,000–6,000 per month. Can I Keep My German Bank Account After Moving to Malta? Basically yes, but German banks are getting stricter with Malta residents. Many require regular confirmation of your tax status and may close accounts if they see red flags. For larger assets, I recommend a Maltese main account plus a German one for ongoing needs. Most online banks are more flexible than traditional brick-and-mortar banks. How Important Is the 183-Day Rule in Practice? The 183-day rule is crucial and is strictly monitored by both countries. You need not only to be physically present, but to show your center of life: home, bank, doctor, social circle. Keep a travel diary, collect all receipts (flight tickets, hotel bills, utility bills), and aim for over 200 days as a buffer. Arrival and departure days each count as full days. What Happens to My German Health Insurance? When you move away, your German health insurance obligation ends. You must deregister with your German health fund and get insured in Malta. EU citizens can choose between state Maltese insurance (free but basic) and private insurance. Private policies are €200–500 per month depending on age and coverage. Many keep an extra German top-up for visits to Germany. How Does Reversal of the Exit Tax on Return Work? In Germany, you can offset the Exit Tax if you return within 5 years and regain unlimited tax residency. Requirements: you still own the same shares that triggered Exit Tax, and you apply for reversal within a year of return. Taxes paid will be refunded; deferred amounts are cancelled. Austria has similar rules but with a 10-year window. Are Properties Affected by Exit Taxation? German real estate isn’t affected by Exit Tax, as it’s still subject to German taxation (limited tax liability). Different for property companies or REITs: if you hold significant shares in real estate GmbHs or listed property funds, regular Exit Tax rules apply. Foreign property may be treated differently depending on the structure. Can I Still Invest in Germany as a Malta Resident? Yes, but with tax consequences. German investment income is still subject to German withholding tax (26.375%), which is credited against Maltese tax. With non-dom status in Malta, you only pay additional taxes if you transfer the income to Malta. Many Malta residents intentionally keep German investments in Germany and transfer only the funds actually needed in Malta. What Does Professional Malta Relocation Advice Cost? A reputable initial consultation is €2,000–5,000; full moving support is €15,000–40,000 depending on complexity. Add annual costs: Maltese tax consultant €8,000–15,000 a year, German advisor for Exit Tax and ongoing support €5,000–10,000 a year. Don’t skimp on advice—bad planning will cost you much more than good advice would have in the first place. What Are the Alternatives to Malta Within the EU? Cyprus offers similar advantages at lower cost, with less bureaucracy, but has some reputational issues. Portugal’s Non-Habitual-Resident program was severely restricted in 2023. Ireland is attractive for non-doms but has a higher cost of living. The Netherlands offers the 30%-ruling for certain expats. Each country has its own pros and cons—an individual analysis is essential.
