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Hi
   I think you may have jumped the gun, what you should do is move to the US sort out your tax status there. Then notify Malta that you have moved and when you get your 2012 tax form from Malta (next year) just enter the months and earnings for Malta.

We moved from France to Malta and did this with the French tax people.
Terry

Thanks Terry for your reply!

My employer is actually saying that I should pay the tax upfront.

how many days will you be short of the 183 ? Can you come back on holiday later in the year to make it up ?

Thanks George for your reply!

I am actually 2 weeks short.  I have actually considered extending my stay for another two weeks however I will be then considered as non resident alien in the US which could end up me paying more taxes there. I am not sure on this though.

Are there any other ways to establish tax residency apart from the 183 days?  In the first place that 183 days rule is not even mentioned in the Malta income tax act.

If I was you I'd go and see an accountant in Malta - for the sake of paying 100-200 €, you will get an educated solution, not one based on heresay and personal circumstances that might not correspond to yours. There could be something you haven't told us that is really important.

Thanks again George!

I am actually an accountant here not a tax accountant though. Our tax guys here in the office has actually the one who brought the idea that I will be considered as non resident. I am just finding ways to prove otherwise.  I just can't accept that I am non resident based on the 183 days rule that is not even in their tax laws. Anyway, thanks for all the replies!!

Jericho_GT wrote:

I just can't accept that I am non resident based on the 183 days rule that is not even in their tax laws. Anyway, thanks for all the replies!!

Thats how I was told - you are not tax resident unless here for over half the calendar year.

can you offset the tax against your US tax bill through the double taxation treaty ?

I see.  To be honest, I don't know If I can claim my tax here as tax credit there. Hopefully I can.

Have you spoken to the tax office ? This is obviously something that crops up quite regularly (ie a foreigner working in Malta, leaving before June 30th), and there maybe an understanding not written into tax law

I am actually gathering information through my friends in other audit firms. It seems that our firm is the only one with a different tax view on this.  As much as I want to side with our firm on this issue, it is favourable for me that our firm is wrong this time. hehe

If you arrived in Malta in March, worked for 5 months, and then left, then I think your firms interpretation is reasonable - you are a non-resident working in Malta.However, thats not your situation -  you were resident in 2011, and it was continuing employment (??)
I guess your firm is saying there is no allowance for split-year taxation (I think thats the phrase).

ps I'm not an accountant - my comments are merely to suggest possible avenues, nothing more

Thanks George. Appreciate all the comments here!