Cash transactions are virtually impossible to trace, unlike bank transfers. This is used by criminals. In large transactions, cash can be used if the money comes from illegal sources. The seller who receives payment in cash may not declare such income and evade taxes.
Until 2021 there was no limit on the amount of transactions in Malta: with cash, you could buy a property or a car. The government introduced a limit to avoid cases of money laundering and tax evasion.
Which transactions are subject to a limit of €10,000
The new rules apply to transactions involving the purchase and sale of luxury goods. Namely:
- Antiques: objects of art and geological, paleontological, or archaeological finds over 100 years old;
- real estate;
- jewelry and wristwatches made with gold, silver, platinum, palladium, diamonds, precious stones, and pearls;
- Precious metals: gold, silver, platinum, palladium and their alloys;
- Precious stones: diamonds, sapphires, rubies, and emeralds;
- Automobiles: new or used;
- Seagoing vessels: ships, boats, and yachts;
- objects of art.
Payment in cash for the purchase of a luxury item is considered legal if the value of the object does not exceed €9,999.99.
The limitation applies to payments made in euros or other currencies. Therefore, when paying in cash, for example in dollars, you need to calculate the total amount at the exchange rate on the date of payment.
❗The limit is applied to the total amount of the transaction
It is not possible to pay more than once for €9999.99. All payments made between the same persons with the same or similar purpose in the last six months are taken into account.
What is the penalty for violating the limit
Under the law, a violation of the limit is considered a criminal offense. Both the buyer and the seller are responsible for the transaction. If the violation is proven in court, the perpetrator pays a fine of at least 40% of the amount over the limit.
The violator can legally avoid court proceedings if he admits guilt and pays an administrative fine. The amount of the fine depends on the amount that the violator paid or received in excess of the limit.
Administrative fine for violating the limit of €10,000
|The administrative fine for violating the limit of||Penalty amount from the amount over €9,999||Minimum fine amount|
|From €10,000 to €50,000||10%||€1,000|
|From € 50,000 to €100,000||25%||€2,500|
Pre-trial settlement is possible only with the permission of the Attorney General of Malta. But it is not possible to avoid criminal prosecution if:
the amount of the cash transaction was more than €100,000;
the case has already gone to court;
the offender has used the possibility of a pre-trial settlement for the same offense within the last three years.
Hiding information or forging transaction documents also entails criminal liability and a fine of up to €25,000.
How to legally pay for large purchases and invest in Malta
Payments of €10,000 or more must be made by
electronic transfer systems;
debit or credit cards;
bank details from one account to another.
When buying real estate in the contract of sale, be sure to specify how to pay for this or that part of the transaction.
Wealthy people who want to get citizenship or a residence permit in Malta by investment, pay government fees, and buy real estate in the country. It is not possible to pay in cash. Payments of fees are made by bank transfer to details from the Community Malta Agency. Purchase of real estate must be paid by one or more legal means.
Examples of properties to buy in Malta
Apartment with a spacious terrace in a new residential complex in Marsascala. Price - from €185,000
Three-bedroom apartment with private pool in St. Julian's. Price - € 740,000
Apartment with panoramic views of the coast in Mellieha. Price - from €310,000
Applicants for Maltese citizenship or residence permit undergo a strict due diligence check. They certify that the income and money for the investment are from legal sources.
Malta also does not grant citizenship or residence permit to persons with a criminal record. Even if the case has not gone to court, the presence of charges of financial crimes is sufficient reason for an investor to be denied a second passport or residence permit. If the investor is denied, he or she will no longer be able to obtain citizenship or residency for investments in other countries.
Immigrant Invest is an agent licensed by the Government of Malta to help you obtain citizenship or residence in the country by investment. Compliance experts at Immigrant Invest conduct preliminary due diligence to identify possible risks. Lawyers verify the purity of payments and real estate transactions.
If you want to obtain a Maltese passport or residence permit, seek advice from the experts at Immigrant Invest.