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Malta Retirement Programme Rules 2012

19.01.2015

In 2012, the Government of Malta launched a special tax status for EU/ EEA and Swiss nationals with the exclusion of Maltese nationals, who are in receipt of a pension, as defined, provided that certain conditions are met.

The eligibility and requirements for the special tax status are set out in the Malta Retirement Programme Rules contained in L.N. 317 of 2012 (the “Rules”) and Guidelines issued by the Inland Revenue Department.

Individuals, who are granted the said special tax status under the terms and conditions as stipulated in L.N. 317 of 2012, shall be charged to tax on their income arising outside Malta which is remitted to Malta at the rate of 15% with the possibility to claim double taxation relief.

Eligibility Criteria to apply for the special tax status

Applicants meeting all of the following criteria may apply:

1. Are in possession of a Qualifying Property Holding being:

  • Owner of an immovable property (purchased post 1 January 2011) in Malta for a value of € 275,000 or €220,000 in the case of property situated in Gozo;
  • Rents an immovable property in Malta for not less than € 9,600 annually or €8,750 annually in the case of property situated in Gozo.

The Rules allow that in the case of immovable property purchased before the 1 January 2011 for a value which is less than the above, such property shall still be considered a qualifying property as long as the value of such property in terms of an architect’s valuation as at date of application under the Rules, is not less than the values indicated above.

The rules also provide that it is important that:

  • the applicant and his dependents have their habitual residence in such property as their principal place of residence,
  • that no person other than the beneficiary, his/her family members or his/her special carer reside in the Qualifying Property Holding

2. Are in receipt of a pension, as supported by documentary evidence, all of which is received in Malta and which constitutes at least 75% of the applicant’s chargeable income;

3. Have a valid travel document;

4. Are in possession of a sickness insurance across the European Union;

5. Are neither a Maltese national nor a third-country national;

6. Are neither of a Maltese domicile nor have the intention to establish a Maltese domicile within five years from the date of application under the Rules;

7. Are fit and proper persons; and

8. Have applied for a Registration Certificate in Malta.

Continuing Obligations

A set of continuing obligations needs to be satisfied by all successful applicants, being that the applicant:

  • must retain holdings of the qualified property;
  • must not become a Maltese national or a third-country national;
  • must not fall to receive in Malta all the pension indicated in the documentary evidence submitted to the Commissioner with the application form;
  • must possess a sickness insurance in respect of all risk covered for Maltese nationals, for himself and dependents; and
  • must not establish a Maltese domicile.

The Special Tax Status

Successful applicants who are granted the special tax status will be subject to a 15% tax in Malta on any income arising outside Malta which is received in Malta by the beneficiary or by any of his/her dependants.

The beneficiary is also allowed the possibility to claim double taxation relief, with a minimum tax cap of € 7,500 in respect of any year of assessment. The scheme will also apply an additional minimum tax of € 500 per dependent of the applicant. The tax paid is non-refundable.

Other

The applicant does not benefit from the Residents Scheme Regulations, the High Net Worth Individuals - EU / EEA / Swiss Nationals Rules, the High Net Worth Individuals Rules - Non-EU / EEA / Swiss Nationals Rules, or the Highly Qualified Persons Rules.

Individuals benefitting under these Rules may hold a non-executive post on the board of directors of a company resident in Malta but are prohibited from being employed by the company in any capacity. Such individuals may also participate in activities related to any institution, trust or foundation of a public character and any other similar organisation or body of persons, which are also of a public character, that is engaged in philanthropic, educational or research and development work in Malta.

Click here to download Malta Retirement Programme Rules 2012.