The Residence Programme Rules

The High Net Worth Individuals Rules have now been amended to reflect the thresholds of the Global Residence Programme and are now entitled the Residence Programme Rules (RPR).

Applicants taking up residence in Malta may benefit from a special and favourable Malta Tax status and treatment and Tax Incentives.

In late June 2014 (earlier this year), the Maltese government also launched the Global Residence Programme (GRP) to replace the HNWI programme (for Non-EU/non-EEA/non-Swiss nationals) which was launched in 2012. The GRP programme lowered the minimum thresholds for the purchase of immovable property and rental property by foreigners in Malta. The minimum tax threshold for tax exiles who purchase property in Malta was lowered to €15,000 from the previous €25,000. The bond amount of €500,000 was removed completely while the application fee for foreigners purchasing property in the South of Malta and Gozo was slightly reduced.

The Residence Programme Rules (RPR), 2014

Applicants taking up residence in Malta may benefit from a special and favourable tax status and treatment as follows:

  • income received in Malta arising from overseas will be charged to a flat rate of 15% corporate tax;
  • income arising in Malta and capital gains realised in Malta would be taxable in Malta at the higher rate of 35%;
  • no Malta tax would be chargeable on income arising outside Malta which is not received in Malta;
  • no Malta tax would be chargeable on capital gains realised outside Malta even if these are received in Malta.

Double Taxation Relief

Successful applicants would also be entitled to relief from double taxation otherwise suffered on income arising outside Malta which is received in Malta. Such relief would be available in the form of unilateral relief (in terms of the Malta Income Tax Act) or, alternatively, under a treaty in force between Malta and the country of source of the relevant income. However, after taking any double tax relief claimed into account, an EU/EEA/Swiss national beneficiary would be required to make an annual minimum Malta income tax payment of at least €15,000.

Eligibility – Malta Residence Programme Rules, 2014

An applicant seeking to benefit from the favourable tax treatment described above would be eligible to apply to the Malta tax authorities for confirmation of his/her special status as such provided that the following key conditions are satisfied (on an initial and ongoing basis):

  • The applicant acquires immovable residential property in Malta against consideration of at least €275,000 (if in the north of Malta, and €220,000 if in the south or in Gozo) or leases such property against aggregate annual rental payments of at least €9,600 (and €8,750 if in the south of Malta or in Gozo). The property need not be acquired or leased at application stage.
  • The applicant and his/her family must occupy the abovementioned immovable residential property in Malta as their principal place of residence and no person other than the applicant and his/her family may reside in the said property.
  • The applicant must be in receipt of stable and regular resources which are sufficient to maintain him/herself and his/her dependants without recourse to the local social assistance system.
  • The applicant must be in possession of private health insurance which covers him/herself and his/her dependants in respect of all risks across the EU.
  • He is in possession of a valid travel document.
  • He can adequately communicate in one of the official languages of Malta
  • The applicant must not be a permanent resident of Malta.
  • The applicant must be a fit and proper person.
  • The applicant must not benefit from the Residence Scheme Regulations, the Highly Qualified Persons Rules or any other special tax status.

Application for the special tax status

An applicant seeking confirmation of the special tax status must be submitted to the local tax authorities by an Authorised Mandatoryregistered as such with the local tax authorities and engaged for the purposes by the applicant. The CSB Group is registered with the local tax authorities as an Authorised Mandatory.

Additional Tax Considerations

Malta does not levy any wealth taxes or estate or such other duties. However, duty is chargeable in Malta upon any inter vivos or causa mortis transfer of immovable property or marketable securities when the document effecting the transfer is executed or used (eg. produced before a court as evidence) in Malta.

Authorised Registered Mandatories

CSB Group was one of Malta’s first officially – recognised mandatories by the IRD (Inland Revenue Department). CSB Group can therefore assist individuals who wish to apply for a special tax status under the Residence Programme Rules.

For more information about the Residence Programme Rules, the Malta Global Residence Programme (GRP) and the Malta Individual Investor Programme, kindly Contact Us

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