Acquiring, Losing or Reviving Tax Domicile under Maltese Law

March 17 22:02 2022 by The Editor Print This Article

What is a Malta Tax Domicile?

Dr Jean-Philippe Chetcuti defines a Malta tax domicile to be an ever-pervading connection with Malta that one is born with, retains despite relocating outside Malta, loses upon establishing substantial ties elsewhere while severing ties absolutely with Malta, and revives upon re-establishing Malta connections.

Domicile at birth - ‘Tax Domicile of Origin’

There are five principles regulating the notion of domicile, the first one being that no one shall be without a domicile.   At birth, one is automatically given the domicile of his father and in cases where the child is born out of wedlock or when the father had passed away the child, adopts the domicile of his mother. The country where a person is born is not necessarily his domicile of origin, hence if for example one is born in Malta but his father is domiciled in Germany he would be domiciled in Germany. 

The domicile of origin is not changed unless one acquires a domicile of choice. Hence, it is irrelevant whether one leaves the country of his domicile of origin permanently because this does not automatically imply a change in his domicile status. Domicile of origin remains relevant throughout the life of the person as domicile retains its capacity for revival.

In order to ensure that the domicile of an individual has been changed to his domicile of choice there must be clear evidence that the individual has no intention whatsoever to return to the country of his domicile of origin.

What is a ‘Tax Domicile of Choice’?

Although the domicile of origin is very difficult to renounce, once a person is eighteen, he has the legal capacity to adopt a new domicile – a domicile of choice.   

At law, the presumption is that one’s domicile is the domicile ex-lege, meaning the one assigned at birth. This implies that when one alleges that he has acquired a domicile of choice, the burden of proof falls upon him. 

In order to do so one must be able to prove that: 

  • He is resident in the new country
  • He intends to reside there permanently or for an unlimited time

Contrary to the domicile of origin, one must be physically present in a country in order to obtain the domicile of choice there. Other factors also come into play when determining domicile of choice, such as the individual’s business and family interests as well as ownership of property. One must break all ties with other countries to be domiciled in Malta.

In IRC v. Bullock (1976), it was determined that even though the one had resided in England for forty years he had not adopted domicile of choice in England, as his intentions never those of residing in England indefinitely. Hence the court determined that domicile of choice was not taken up by Mr Bullock and that he had maintained his domicile of origin. 

What is a ‘Tax Domicile by Operation of Law’?

To establish a definite legal system by which certain rights and obligations may be governed, the objective of the law is that no person shall be without a domicile. This is crucial today, especially because free movement has given not only rights to individuals but also obligations and in the interest of liability, it is necessary to hold that a person cannot posses more than one domicile at the same time. 

Given the importance of having a domicile, in situations where one cannot establish the domicile of origin and is unable to make a choice, the law intervenes. The third kind of domicile is the domicile of dependence and it arises by operation of law.   It is a domicile in which the law establishes a person’s domicile, such as in the case of a foundling, where the law provides that a foundling acquires the domicile of the country where he is found. It has been held that as the domicile of origin requires the child to take the domicile of the father at birth, in the case where either the child’s father is dead or the child is illegitimate, the child acquires the domicile of the mother.

Until one has the legal capacity to adopt a domicile of choice, his domicile of origin will be replaced by domicile of dependence should the person on whom he is legally dependent adopt a domicile of choice elsewhere. This means that until a person reaches adulthood his domicile will shift according to the domicile of the person on whom he is dependent. Women take up their husband’s domicile upon marriage and such domicile is maintained even if they are legally separated or if the husband passes away (Attard, 2005). 

Revival of Tax Domicile

The importance enjoyed by the domicile of origin results from its automatic revival whenever a domicile of choice is abandoned without the acquisition of a new one[1]


[1] Mann, Michael. “The Domicile Bills.” The International and Comparative Law Quarterly, vol. 8, no. 3, Cambridge University Press, 1959, pp. 457–64,   Malta Commissioner for Revenue

The Authors

Dr Jean-Philippe Chetcuti is a senior partner and co-founder of Malta law firm Chetcuti Cauchi Advocates, a member of the Malta Institute of Taxation, past lecturer in Advanced Taxation paper (P6) at the Richard Clarke Academy (now the PwC Academy).  Dr Anna Sultana is an associate lawyer in the Tax & Immigration practice at Chetcuti Cauchi Advocates, where she advises on employee taxation, tax incentives for executive expatriates and special personal tax status..