Exit taxation applies when a taxpayer transfers assets, tax residence out of Malta, or business operations to another jurisdiction. A taxpayer shall be subject to tax on capital gains that are to be calculated at an amount equal to the market value of the transferred assets, at the time of exit of the assets less their value for tax purposes.
Triggering events include the following:
• Transfer of assets from a Maltese head office to a foreign permanent establishment,
• Transfer of assets from a Maltese permanent establishment to its foreign head office or to a foreign permanent establishment,
• Transfer of tax residence out of Malta, or
• Transfer of business carried on by a permanent establishment in Malta to another jurisdiction.
The payment of exit tax may be deferred over five years if the transfer is to an EU/EEA country.