Malta Crypto Tax Guide in 2024 – Everything You Need to Know

Malta is one of the most progressive countries in Europe and in the world when it comes to cryptocurrency as it has adopted several laws outlining regulations and tax guidelines for all those owning cryptocurrency assets. Since Malta is quite progressive in that sense, Malta tax authorities treat cryptocurrencies just like any other currency

Cryptocurrency transactions in Malta are divided into two main categories—personal and those tied to businesses, and Malta crypto taxes depend on which category they fall into. While individuals may be exempt from Malta crypto taxes, businesses conducting crypto trading and mining have to pay taxes on a regular basis.

It’s important to understand how cryptocurrency tax regulations work in Malta, and this article will provide you with an in-depth overview of the cryptocurrency tax system, how it works, and how much tax you can expect to pay for your cryptocurrency assets in Malta.

Overview of the Cryptocurrency Tax System in Malta

Malta has long been known as a leading pioneer in the crypto sphere and has garnered itself the nickname of the “blockchain island.” It was actually the first country to back the crypto industry by bringing a legislative package to the fore, and thereby creating a regulatory ecosystem in which both the currency and industry can operate and grow.

It is the go-to country for any entrepreneur or fintech company that wants to work on blockchain technology, as its progressive approach, unbiased taxation system, and the fairness of the crypto tax have made it one of the best crypto-friendly countries in the world.

With an aim to monitor and manage local and international operations in the cryptocurrency market, Malta came up with three bills to supervise and tax cryptocurrency exchanges occurring across its land. These Malta cryptocurrency regulation acts were established in 2018, and are referred to as the MDIA act, ITAS act, and the VFA act.

In a sense, all three acts are a form of governance put in place “by engineers for engineers” to eliminate obscurity in what was essentially a new and ungoverned market sphere.

Malta cryptocurrency tax laws reflect the high-level principles of the EU and are based upon three fundamentals: consumer protection, market integrity, and industry protection.

Objectives of Malta Cryptocurrency Regulation Acts

How Is Cryptocurrency Taxed in Malta in 2024?

Cryptocurrency in Malta is considered to be a form of exchange for provided goods. Typically, Malta tax authorities don’t apply tax to crypto exchange transactions, but if you’re using it for goods and services, tax may apply. Maltese tax authorities differentiate between two types of crypto entities—individuals and businesses. Here’s the breakdown of how crypto is taxed in Malta in 2024.

Crypto taxes for individuals in Malta in 2024

• Occasional trading: If you’re not using cryptocurrency on a regular basis to trade, you may be exempt from paying taxes in Malta. Typically, these are considered to be private transactions and do not fall under the category of business-like exchanges.
• Crypto selling: All profits you make as an individual from selling cryptocurrencies aren’t taxed and aren’t considered to be capital gains.
• Frequent trading and large sums: In case you’re involved with a crypto trading activity often or if you deal with large sums of currency, Malta tax authorities will consider that to be a business activity. Precisely because of that, you may be subject to personal income tax that may range between 15% and 35%.

Crypto taxes for businesses in Malta in 2024

• Business trading: All companies based in Malta that offer trading services or provide any crypto-related services have to pay tax at a rate of 35%. It’s important to note that this can be reduced to a minimal rate of 0% to 5% with proper structuring understanding and usage. In this case, it would be best to reach out to a lawyer with an in-depth understanding of the Maltese taxation system.
• Crypto mining and staking: Any mining and staking activities are subject to tax income. That means that the corporate tax rate for businesses in Malta applies here. Any individuals who perform such activities are also subject to the same crypto tax.

What Are the Tax Rates for Crypto Gains in Malta for 2024?

Tax rates for crypto gains in Malta in 2024 depend on whether you’re an individual trading occasionally or professionally, and if you’re a business offering services related to crypto. Here’s the breakdown of tax rates for crypto gains in Malta in 2024.

Tax rates for crypto gains in Malta in 2024 for individuals

All individuals involved with occasional crypto trading are typically exempt from capital gains tax. It’s important to note that this has to be occasional and you shouldn’t be working with large sums. In case Malta tax authorities consider your transactions to be too frequent or too large, you will have to pay for personal tax income rates that may vary from 15% to 35%. This depends on your total annual income.

Long-term investments are also exempt from tax on capital gains.

Tax rates for crypto gains in Malta in 2024 for businesses

All businesses offering services like professional trading, mining, or similar blockchain services will have to pay a regular tax rate of 35%. This may be drastically reduced with proper structuring. It may be reduced to a rate of 0% to 5%, but you will need a professional with a deep understanding of Malta’s tax regulations.

Malta Crpyto Tax Rates

Malta crypto tax rates depend on whether you’re operating with cryptocurrencies as an individual or business.

Individuals typically don’t have to pay capital gains tax, but if they are frequently trading and operating in a business-like manner, tax rates between 15% and 35% may apply. This also depends on your annual income.

Businesses have to pay a flat tax rate of 35% in Malta, but this number can be lowered with proper structuring. If you get a professional with a deep understanding of crypto tax regulations, you can lower it to 0% to 5%.

DLT Asset Classification

All cryptocurrencies, including the top 10 cryptocurrencies used across the globe, are subject to asset classification under the Income Tax Act (ITA) to determine their purpose and valuation. The four categories under which a DLT asset could fall are: coins, financial tokens, utility tokens, and hybrid tokens.

While the classification of these digital assets is mandatory, it does not necessarily make them subject to taxation. In fact, any taxation that would be applicable to DLT assets would only be determined by the context within which they are used, as well as the purpose for which they are used.

The Maltese crypto tax considers the nature of the transaction of a virtual financial asset, the status of the parties involved, and the specifics and circumstances of each transaction. Once determined, DLT transactions may be taxed under regular income tax, or other taxations.

Definitions of DLT asset classification categories

1. Coins

These DLT assets are designed to be used in place of fiat currencies in the crypto world, and are their digital equivalent. They act as a means of payment, store of value, or medium of exchange. Coins do not hold any characteristics of securities, are not connected with any project or equity of the issuer, and their utility, value, or application is in no way assumed as a direct redemption of goods or services.

2. Financial tokens

These are DLT assets with attributes similar to Financial Instruments such as equities, debentures, shares, derivatives, or units in collective instrument schemes. They are commonly known as Security Tokens, but may also be referred to as asset tokens, or asset-backed tokens.

Financial tokens are analogous to Financial Instruments in the sense that they grant rights to dividends in the same way equities and shares do. They also grant rights to payments from units in collective investment schemes, interest payments like bonds, or even payments connected to the performance of specific assets like derivatives.

These Security Tokens may also be used to grant rewards based on voting rights or performance, represent asset ownership rights, or rights secured by their asset form, or a combination of the aforementioned.

3. Utility tokens

These DLT assets are designed to be used as a form of digital exchange for goods and services within a limited network or platform.

Their utility, value, and application are solely limited to the acquisition of products and services available on those same platforms in which they are being used.

A utility token is in no way connected with the equity of the issuer and does not hold any characteristics of security.

4. Hybrid tokens

These are DLT assets that have features similar to both financial and utility tokens. They are used interchangeably depending on the condition of the trade.

Valuation of a DLT Asset in Malta

In order to properly tax DLT asset transactions, each asset has to be given a specific valuation in adherence with the Maltese tax law. The Income Tax Act states that the reference value of a taxable asset shall be its market value, as per the rate established by the relevant authority in Malta.

The cryptocurrency value must also be converted to the value of the appropriate fiat currency in which the legal entity presents their financial statements.

In cases where the market value of an asset is not available for tax reference, it will be determined based on the average quoted price seen on reputable exchanges, or on the date of the relevant transaction.

If neither approach is proven satisfactory for crypto taxation purposes, then the asset value will be based on any other methodology preferred by the Commissioner for Revenue (CfR).

Moreover, the ITA of the crypto tax law also states that where a company accepts cryptocurrency coins as a form of payment, then the transaction will be treated as if the payment had been made in any other (fiat) currency.

However, if the payment were to be made by transfer of financial or utility tokens, then the transaction will be treated in such light for income tax purposes.

Revenue Guidelines on the Tax Treatment of Crypto-Assets in Malta

To manage cryptocurrency taxation, the Commissioner for Revenue in Malta issued a set of revenue guidelines in November 2018 pertaining to the income tax treatment of any arrangements or transactions involving crypto assets.

While no new rules were created in that effort, existing rules were given appropriate interpretations under the Maltese crypto tax laws in the context of each DLT asset class.

These guidelines define whether or not the transactions of cryptocurrencies are subject to taxation under income tax laws and crypto tax laws.

An example of an occasion where the transaction of a token would not be taxable is when the profits generated by it are considered a foreign capital gain.

This is due to the fact that Malta does not place taxes on foreign capital gains, and the Malta crypto-friendly approach is to treat cryptocurrency gains under the unified regulations of the act of income tax. Crypto profits derived out of regular transactions of securities, however, will be subject to tax on the condition that the assets are sited in Malta.

Other Crypto Tax-Friendly Countries

While Malta is considered a pioneer in the crypto sphere, it is not the only crypto-friendly nation around the world. Cryptocurrency is fast becoming the most flexible and convenient form of monetary transactions, and even though governments worldwide were initially skeptical of using it because of its anonymity, some nations have already started adopting it into their economies.

These crypto-friendly countries are currently leading the digital assets market and paving the way for other nations to follow in their footsteps, and they include Portugal, Slovenia, the Netherlands, Canada, Germany, and Luxembourg, among others.

Portugal

Portugal has also established itself as a Bitcoin-friendly country. Several Bitcoin ATMs have been installed throughout Portugal, and legislation favors cryptocurrency. The Portugal Golden Visa scheme has been a fantastic immigration option for international investors looking to secure their digital assets, and realize cryptocurrency transactions without being largely taxed. To top it off, several investment migration consultants like Global Citizen Solutions use Bitcoin for the consultancy fee, but fiat currency is still needed to make the required economic contribution of $250,000 to obtain the Golden Visa.

Canada

Canada is one of the fastest-growing economies in the world. To no one’s surprise, it was the first country in the Americas to establish a legal framework to regulate cryptocurrency.

Canada’s Proceeds of Crime and Terrorist Financing Act (PCA) has helped them to bring all the entities and persons dealing in cryptocurrencies under their radar, making it easy to track all the transactions and monitor illegal activities in crypto payments.

Canada has no laws that say cryptocurrency dealing is illegal, placing them among cryptocurrency-friendly countries.

The country’s tax system is unbiased and immigrant-friendly, which makes it one of the top crypto-tax-friendly countries. It is the most suitable country to start your own crypto business as there are no heavy capital gains taxes to consider.

Canada is not only an excellent destination for trading cryptocurrencies but also one of the prime locations for cryptocurrency mining. Its vast resources and availability of all the latest technologies make it one of the top crypto-mining-friendly countries.

If you want to set up your own mining farm, Canada is among the best crypto-friendly countries to move to, as it fulfills all the needs for one’s crypto-related activities.

Singapore

Regarding Bitcoin-friendly countries in Asia, one country stands at the top: Singapore. It is famous as the far east’s fintech hotspot, and the Singaporean government has shown great interest in cryptocurrency.

The Monetary Authority of Singapore has progressive plans for the crypto industry and safety measures to prevent money laundering and other criminal activities.

If you are looking to establish cryptocurrency finances, Singapore stands out as one of the prime choices for crypto investors, primarily due to the absence of capital gains tax on cryptocurrency trading.

However, organizations based in Singapore that act as crypto trading companies and deal with crypto payments are bound to pay capital gains tax as per their income tax laws. But that doesn’t stop Singapore from being one of the most crypto-friendly countries.

Antigua and Barbuda

Antigua and Barbuda is the only country in the world to allow investors to pay for their citizenship by investment program in Bitcoin. The country is a paradisiac Caribbean island, whose passport allows visa-free and visa-on-arrival travel to 150 countries.

Residents and citizens of Antigua and Barbuda enjoy relaxed tax conditions since there are no capital gains, inheritance tax, income tax or wealth tax on worldwide income or assets.

One of the perks of the Antigua and Barbuda citizenship by investment program is that its process to citizenship is fast and affordable, taking around five months altogether.

Vanuatu

In 2017, the Vanuatu government announced that it would accept Bitcoin as payment for its citizenship by investment program. However, there has been some confusion as some officials denied that cryptocurrency could be used.

As of October 2023, there has been no official word that you can’t use Bitcoin, so for the time being, it is possible.

In some cases, a third-party agent accepts the Bitcoin exchange, sells it for real-world money and pays the Vanuatu government on your behalf.

In another scenario, you must first sell your Bitcoin and transfer the funds into an identifiable bank account.

How Can Global Citizen Solutions Help You?

Global Citizen Solutions is a boutique investment migration consultancy firm focused on finding the right residency or citizenship by investment program for individuals wishing to secure their future and become global citizens. With offices in Portugal, the United Kingdom, Hong Kong, and Brazil, our multilingual team guides individuals and families from start to finish, providing expert advice considering freedom, mobility, taxation, and security.

• We have helped hundreds of clients from 35+ countries in all the top residency by investment and citizenship by investment programs. With an in-depth and comprehensive understanding of the area, we provide our clients with solid guidance. 
• Our team has never had a case rejected. Our 100 percent approval rate sets us apart from our competitors and guarantees that you can expect a successful application.
• Our transparent pricing covers all the processes from opening your bank account, document certification, and legal due diligence to investment and submission. As there is one fee for the entire process, you can be confident that you will not face any hidden costs later.
• All data is stored within a GDPR-compliant database on a secure SSL-encrypted server. You can be safe knowing that your personal data is treated with the utmost security.
• Global Citizen Solutions provides an all-encompassing solution. Our support can continue even after you receive your passport. We offer additional services such as company incorporation, Trusts, and Foundations formation.
• The BeGlobal Onboarding System® allows you to access the status of your application every step of the way, something that sets us apart from our competitors.

Frequently Asked Questions about Malta Crypto Tax

What are the Malta crypto tax regulations in 2024?

Cryptocurrencies in 2024 Malta are considered to be capital assets and you have to pay a 35% capital gains tax. It’s important to note that trading and mining are also taxable.

In case you have long-term holdings, you might be exempt.

Does Malta offer crypto tax incentives in 2024?

Yes, Malta offers crypto tax incentives in 2024. These incentives aim to promote blockchain innovation.

If you have long-term holdings of cryptocurrencies you could be exempt from capital gains tax. On top of that, certain crypto-related activities, such as research and development, may help you qualify for additional tax benefits.

Is crypto tax-free in Malta?

The Malta crypto-friendly tax approach considers the nature of crypto transactions, the status of the parties involved, and the specifics and circumstances of each transaction under the tax treatment. It does not grant a free pass for cryptocurrency.

Is crypto regulated in Malta?

Yes, cryptocurrency is regulated by the Commissioner for Revenue under specific guidelines and acts that were established in 2018.

Can I buy citizenship with cryptocurrency in Malta?

You cannot buy citizenship with cryptocurrency or fiat currencies, but you can apply for either one of Malta’s residency and citizenship schemes and work your way towards citizenship by means of naturalization, provided you place a substantial investment in Malta.