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Updated: June 2026

Case study · Malta · Tax

How a US Citizen Reduced Tax Burden on Foreign Assets through Malta GRP and DTA Agreement

US citizenship is the only one in the world that taxes worldwide income regardless of where a person lives. Michael sought a legal way to reduce US tax burden on his European and Asian assets and obtain a residence permit in a safe English-speaking European country. We explain how Malta's GRP status and the tax treaty on avoidance of double taxation between the US and Malta eliminated double taxation and optimized the structure—honestly, without promising the impossible.

Dmitry NagyDmitry NagyInternational Tax Consultant, BRIDGESReading time10 min readVerificationReviewed by an expert

This case is based on a real matter. The name and certain identifying details have been changed to protect confidentiality.

BRIDGES client story - How a US Citizen Reduced Tax Burden on Foreign Assets through Malta GRP and DTA Agreement
Contents

Case at a glance

Situation, solution and outcome in seven lines

Client
Michael, 47, a US citizen from Miami, assets in Europe and Asia
From
USA, with assets in Europe and Asia
Program
Malta, Global Residence Programme
Task
Reduce US tax burden on foreign assets, obtain EU residence permit
Special Feature
USA taxes worldwide income of citizens everywhere
Solution
GRP + structuring under the US-Malta DTA agreement
Result
Double taxation eliminated, tax burden on foreign assets optimized

Client story

Client's Story

Where they started

Michael is a US citizen with diversified assets: stakes in European companies, investments in Asia, real estate outside the States. He wanted to live closer to his European projects and chose Malta—English-speaking, safe, and in the EU.

Why the standard route did not work

But every American faces something unique to their citizenship: the US taxes worldwide income regardless of place of residence. Wherever Michael moved, his obligations to the IRS remained. Additionally, European and Asian countries withheld their own taxes at source—creating a real threat of paying double taxation on the same income.

What BRIDGES had to solve

From the start, Michael was realistic: he was not looking for a way to stop paying US taxes—that is impossible and illegal. He sought legal optimization: eliminate double taxation, use tax treaties and credits, so he would not pay in full to both America and the country of source.

Why a standard answer would not do

He approached BRIDGES for honest expertise—not a promise to eliminate US taxes, but for a competent structure that leverages the US-Malta agreement and foreign tax credits in his favor.

You cannot escape the IRS, and I never intended to, but I was paying twice. Hanna arranged a Maltese status and aligned everything with the tax treaty. The double tax is gone, and the family has EU residence.

Michael · US citizenThe name and certain identifying details have been changed to protect confidentiality.

What Was at Risk

What Was at Risk

It is important for Americans to distinguish between legal optimization and unfulfillable promises. You cannot completely eliminate US tax—but you can stop paying double and properly use agreements and credits. Anything that promises eliminating IRS obligations is a risk, not a solution.

Double taxation: US tax plus tax at source in Europe and Asia

  1. 01Unutilized benefits of agreements and foreign tax credits
  2. 02FATCA reporting complications with unstructured foreign assets
  3. 03Temptation of illegal schemes to "eliminate" US tax with severe consequences
  4. 04Lack of reliable European residence permit to live near assets

The logic of the solution

How the matter progressed: from checks to result

The chart is built from the facts of this matter and shows the logic of the work without decorative or unverified data.

  1. 01
    Stage 1

    We conducted a thorough audit: identified which US tax obligations remain and where actual double taxation occurs.

  2. 02
    Stage 2

    We established Malta GRP status - genuine EU resident permit with substance, residence, and insurance.

  3. 03
    Stage 3

    We structured European and Asian income under the US-Malta tax treaty to avoid double taxation.

  4. 04
    Stage 4

    We optimized foreign tax credit (FTC) so that taxes paid abroad reduce the burden rather than add to it.

  5. 05
    Stage 5

    We properly characterized foreign income under Malta non-dom principles and brought FATCA reporting into compliance.

Takeaway. Additionally, he now has a genuine EU resident permit - the ability to live near his European projects with clear status and organized FATCA reporting. The structure withstands both US and European scrutiny.

How we solved the issue

How we solved the issue

The work was split into verifiable stages so that every conclusion rested on documents.

  1. 01

    Stage 1

    We conducted a thorough audit: identified which US tax obligations remain and where actual double taxation occurs.

  2. 02

    Stage 2

    We established Malta GRP status - genuine EU resident permit with substance, residence, and insurance.

  3. 03

    Stage 3

    We structured European and Asian income under the US-Malta tax treaty to avoid double taxation.

  4. 04

    Stage 4

    We optimized foreign tax credit (FTC) so that taxes paid abroad reduce the burden rather than add to it.

  5. 05

    Stage 5

    We properly characterized foreign income under Malta non-dom principles and brought FATCA reporting into compliance.

  6. 06

    Stage 6

    We documented program compliance and ties to the jurisdiction to ensure status is robust against both IRS and European authorities.

Expert comment

With Americans, I always start with an honest conversation: you cannot escape US tax, and anyone promising otherwise is setting up problems with the IRS. But double taxation is a real and solvable problem. The US-Malta treaty plus foreign tax credits eliminate situations where you pay both the US and the source country. We gave Michael not a fairy tale about zero taxes, but a working and lawful structure - plus genuine European status as a bonus.

Dmitry Nagy, International Tax Consultant, BRIDGESDmitry NagyInternational Tax Consultant, BRIDGES

Outcome

What the client received

Metric
Before · After
Double taxation
Yes · Eliminated (DTA + FTC)
Source withholding tax in EU/Asia
Full rate · Reduced under treaty
US tax on worldwide income
Yes · Remains, without double taxation
Status in Europe
No · Genuine Malta residence permit
Status in Europe
No · Genuine Malta residence permit

Michael got what is real and lawful: double taxation eliminated, European and Asian income structured under the US-Malta tax treaty, and taxes paid abroad applied as credits rather than added to US liability. IRS obligations remain - but without overpayment.

Practical takeaway

What matters in a similar situation

  • Additionally, he now has a genuine EU resident permit - the ability to live near his European projects with clear status and organized FATCA reporting. The structure withstands both US and European scrutiny.
  • This case demonstrates that honest expertise for a US citizen is more valuable than grand promises. US tax does not disappear, but competent work with treaties and credits converts double burden into single burden and makes foreign asset ownership efficient.
  • Structuring under the US–Malta double tax treaty removes double taxation of foreign assets. We will look at your situation.

FAQ

Questions people ask in a similar situation

01Can a US citizen stop paying US taxes?

No. The US taxes worldwide income of citizens regardless of residence. Anyone promising to eliminate IRS obligations offers an unlawful and risky scheme.

02What does Malta status provide a US citizen?

A genuine EU residence permit and access to the US-Malta tax treaty, which combined with foreign tax credits eliminates double taxation on foreign assets.

03What is foreign tax credit?

Foreign Tax Credit is a mechanism whereby taxes paid abroad reduce the U.S. tax liability, ensuring that the same income is not taxed twice.

04What about FATCA?

A U.S. citizen's foreign assets are reportable under FATCA. We establish proper structure and reporting to ensure full transparency and compliance.

05Is permanent residence on Malta required?

GRP status does not require year-round residence on the island but does require real substance—property ownership and compliance with program rules, including the 183-day requirement.

06Which documents were key in this case?

We conducted a thorough audit: identified which US tax obligations remain and where actual double taxation occurs. We established Malta GRP status - genuine EU resident permit with substance, residence, and insurance.

07Why did the standard route not suit the client?

But every American faces something unique to their citizenship: the US taxes worldwide income regardless of place of residence. Wherever Michael moved, his obligations to the IRS remained. Additionally, European and Asian countries withheld their own taxes at source—creating a real threat of paying double taxation on the same income.

08What risk had to be closed before filing?

It is important for Americans to distinguish between legal optimization and unfulfillable promises. You cannot completely eliminate US tax—but you can stop paying double and properly use agreements and credits. Anything that promises eliminating IRS obligations is a risk, not a solution. Double taxation: US tax plus tax at source in Europe and Asia

About the author

Dmitry Nagy

Author: Dmitry Nagy

International Tax Consultant, BRIDGES

I lead the international tax practice at BRIDGES and work at the intersection of tax residence, cross-border reporting and banking compliance. I assess how citizenship, residence, relocation or a new ownership structure may affect the client's tax obligations, banking profile and capital.

My work covers tax residence, CRS and FATCA requirements, source of funds and the questions a bank may raise. These elements should be considered together, because inconsistencies between documents, declarations and the underlying circumstances can create risks after a status has been obtained or an account has been opened.

During the consultation, you will receive an assessment of the tax and banking implications of the proposed decision. Where further work is required, I determine the financial documentation and personally oversee the tax and compliance aspects of the BRIDGES project.

Prepared on the basis of BRIDGES practice and reviewed by a subject-matter expert.

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Dmitry NagyInternational Tax Consultant, BRIDGES
Dmitry Nagy, International Tax Consultant, BRIDGES

Names and certain details have been changed to protect client confidentiality. The result described reflects one specific situation and is neither a public offer nor a guarantee of a similar outcome. Programme terms are stated as of 2026 and may change - please confirm current parameters with a BRIDGES consultant.