Malta: The Resident Programme

The Residence Programme Rules have been introduced with effect from the 1st July 2013 granting successful applicants a special tax status.

Applicant

An individual who is an EU national/ EEA national / Swiss National.

Eligibility Criteria

All the following eligibility criteria must be satisfied by the applicant who must be:

An individual who is not a beneficiary of the following schemes:

1. 1. Residents Scheme Regulations
   2. High Net Worth Individuals Rules
   3. Malta Retirement Programme Rules
   4. Global Residence Programme Rules
   5. Qualifying Employment in Innovation and Creativity Rules
   6. Highly Qualified Persons Rules.

An individual who:

Owns a Qualifying Property:

1. 1. 1. 1. Immovable property situated in Malta worth €275,000 or more
         2. Immovable property situated in the south of Malta worth €220,000 or more
         3. Immovable property situated in Gozo worth €220,000 or more

Leases a Qualifying Property:

1. 1. 1. 1. 1. Immovable property situated in Malta with an annual rent of not less than €9,600
            2. Immovable property situated in the south of Malta with an annual rent of not less than €8,750
            3. Immovable property situated in Gozo with an annual rent of not less than €8,750

The applicant must also be in receipt of stable and regular resources that suffice to maintain himself and his dependants, hence not necessitating recourse to Maltese social assistance services

The individual must possess:

• A valid travel document
• A sickness insurance that covers himself and his dependants in respect of all risks across the EU as are normally covered for Maltese nationals
• The applicant must be able to communicate in Maltese or English
• The applicant must be a fit and proper person – this necessitates the taking into consideration of a number of assessment criteria by the Commissioner of Inland Revenue.

Tax Treatment

The beneficiary – the individual who has been granted a special tax status in accordance with the Residence Programme, will be subject to a tax of 15% on any chargeable income received in Malta from foreign sources. This rate is also applicable to his/her spouse, minor children and children who are in the care and custody of the beneficiary or his/her spouse.

Other income that is chargeable to tax in Malta that is not charged as separate income at the abovementioned rate of 15%, will be charged at the rate of 35%.

The individual is liable to pay a minimum annual tax of €15,000. This rate covers the income of the beneficiary and his/her dependants, that arises outside Malta and is received in Malta.

This minimum tax is to be paid by not later than 30th April of the year in which the oncome is received and is to be paid in full.

The beneficiary is subject to the payment of a provisional tax.

Disqualification

An individual who has a permanent residence certificate or who has applied for permanent residency under the Free Movement of European Union Nationals and their Family Members Order, may no longer benefit from the abovementioned tax treatment.

Minimum Residence Period

Although there is no minimum residence period, an individual who possesses the special status under the Residence Programme, may not reside in any other tax jurisdiction for more than 183 days in any calendar year.

Administrative Fee

The following non-refundable administrative fees are to be paid:

• €6,000 where the qualifying owned property is situated in Malta, other than the south of Malta or Gozo
• €5,500 where the qualifying owned property is situated in the south of Malta

Contact Rudolph Psaila to find out more.