In July 2013, the Maltese Government introduced a new residency programme, which will confer special tax status to third country nationals (excluding EEA and Swiss nationals) in Malta. Applicants under this programme must satisfy certain conditions including acquiring or renting qualifying immovable property situated in Malta or Gozo and pay a minimum annual tax liability on foreign income received in Malta.
Holders of a permit under the Global Residence Programme (GRP) will pay tax at a flat rate of 15% on foreign source income received in Malta (including foreign source income received in Malta during the whole of the year in which the GRP permit was granted). This is subject to a minimum annual tax liability of €15,000 after allowing for any double taxation relief which the beneficiary may be entitled to in terms of Malta’s extensive double taxation treaty network (Malta is a party to over 60 double tax treaties) and Malta’s domestic tax rules. No additional tax will be paid by the beneficiary’s dependants. Any income arising in Malta would, in turn, be taxable at 35%.
The minimum tax payment of €15,000 must be paid by not later than 30th April of each year, while the payment in respect of the year in which the GRP permit was issued must be paid either before 30th April of that same year or at the time of issue of the GRP permit, whichever is the later.
To qualify as a GRP permit holder, the applicant must purchase or rent immovable property in Malta or in Gozo, which property must be solely occupied by the applicant, his/her family members and any special carers. In case the property is purchased, its purchase value must be not less than €220,000 if situated in the South of Malta or in Gozo, or not less than €275,000 if situated in any other location in Malta. If the applicant purchased a property prior to the introduction of this programme at a cost which is less than the values indicated above, such property will still be considered to be a qualifying property for the purpose of programme if the value of the property, on the date of application, is certified by an architect to be at least equivalent to the minimum values indicated above.
Should the applicant choose to rent the property, the annual rental thresholds are set at a minimum of €8,750 for a property situated in the South of Malta or in Gozo and €9,600 for a property situated in any other location in Malta.
The property so purchased or rented must be the applicant’s primary residence and principal place of abode worldwide. Furthermore, such properties cannot be let or sublet and if such is done then the applicant will no longer qualify as a beneficiary under the programme and lose the special tax status.
Applicants under this programme, and their dependants, cannot be persons who are already beneficiaries, in Malta, under any other residency programme. Furthermore, applicants and their accompanying dependants must be covered by a health insurance policy which provides an all risks coverage across the EU as normally covered for Maltese Nationals. In addition, applicants must be in receipt of stable and regular financial resources which are sufficient to maintain themselves and their dependants. Applicants must also be fluent in English or Maltese.
Although there is no requirement for a beneficiary to spend a minimum number of days in Malta, it is to be noted that beneficiaries under this programme may not spend more than 183 days in a calendar year in any other jurisdiction.
Finally, applicants must satisfy a fit and proper test as set out by the Maltese Authorities and must hold a valid travel document.
For beneficiaries to retain their GRP status, all qualifying criteria must be complied with at all times and this must then be confirmed on a yearly basis.
Should a beneficiary require a special carer to accompany him/her to Malta, such carers must be individuals who have been in an employment relationship with the beneficiary for at least two years prior to the submission of the application for GRP status.
The programme also covers dependants defined as follows:
- the beneficiary’s spouse or a person with whom the beneficiary is in a stable and durable relationship;
- minor children, including minor adopted children, who are in the care or custody of the beneficiary or person mentioned in (a) above;
- persons under the age of 25, including adopted persons, who are children of, and are in the care and custody of, the beneficiary or the person mentioned in (a) above, provided that such persons are not economically active;
- persons, including adopted persons who are children of, and in the care and custody of, the beneficiary or the person mentioned in (a) above, and who, because of illness or disability, are unable to maintain themselves;
- dependent brothers, sisters and direct relatives in the ascending line of the beneficiary or the person mentioned in above.
Should the permit holder pass away, the tax status under the programme will be transferred to a dependant of the deceased beneficiary who has either inherited the qualifying property or has rented the property immediately after the beneficiary’s death. Such status will be transferred once it is proven that the said dependant has satisfied all the conditions to hold GRP status.
Applying for a GRP permit
Applicants for a GRP status are required to submit the relevant application through an Authorised Registered Mandatory (ARM). In this regard, kindly note that EMD is licenced as an ARM and may assist throughout the entire application process, as well as with the compliance obligations required by the Programme.
The application is to be submitted together with a non-refundable administrative fee of €6,000 payable to the Maltese authorities (a fee of €5,500 is paid where the beneficiary acquires or rents immovable property situated in Gozo or in the South of Malta).
|For further information kindly contact EMD at firstname.lastname@example.org
or on +356 2203 0000 or visit www.emd.com. mtThe above information has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this brochure without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy and completeness of the information contained in this brochure, and the firm does not accept any liability and disclaims all responsibility for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this brochure or for any decision based on it.