The concept and implications of residence and domicile under the Maltese Income Tax Act

Abstract

"Internationalisation" and "globalisation" are two words which today form part of common parlance. It has to be recalled, however, that it has not always been the case. For quite some time, internationalisation and globalisation featured almost exclusively in the commercial, financial and industrial literature. The significance in the change of usage reflects not only the world-wide spread of cross-country and inter-continental commerce but also, and most importantly for this study, in the travel and translocation of commercial I financial enterprises and the people who own and manage them. As a result a commercial company can be registered in one country but operate in several other countries. Furthermore, it can be owned by individuals who are nationals of neither the country where the company is registered nor where it operates. To complicate things further the owner or owners may not even reside in the country of their nationality or in any country where the company is registered or operates. This raises the leading question for fiscal purposes - which country or countries have the right to levy taxes on income of such individuals. This study attempts to throw some light on the issues raised by this question. The charging provisions of most fiscal and financial statutes rely heavily on the term residence. It occurs over and over again as a determinant of chargeability, either in isolation, or with an added qualification, such as ordinarily, or in conjunction with the term domicile. Such terminology is fundamental to revenue legislation.