The Malta Retirement Programme Rules, 2012

Salient Features

✓Applicable to EU/EEA/Swiss Nationals
✓A flat rate of 15% on foreign sourced pension income remitted to Malta
✓A flat rate of 35% on any other income
✓A minimum annual tax payment of €7,500, plus €500 per accompanying dependant
✓Possibility of claiming double taxation relief
The Malta Retirement Programme Rules 2012, which apply to pensioners, introduce a new Tax Scheme conferring a Malta special Tax Status for EU/EEA/Swiss Nationals, with the exclusion of Maltese nationals. Such status will give its beneficiaries the right to pay tax at a rate of 15% on foreign source income received in Malta, by the Scheme’s beneficiaries or their dependants, subject to a minimum tax payment of €7,500, with an additional €500 per dependant and special carer, if any. The Scheme also confers the right to claim double taxation relief. Any income arising in Malta would, in turn, be taxable at a rate of 35%.

The said Scheme requires its applicants, namely pensioners to 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 accompanying them. The property in question must have been purchased for a value of not less than €275,000 if in Malta, or €250,000 if situated in Gozo. The rental thresholds are set at a minimum of €9,600 per annum for a property situated in Malta, or €8,750 per annum for a property situated in Gozo. Such property must serve as the applicant’s habitual place of abode worldwide.

Furthermore, in order to become eligible to apply for this Scheme, the whole amount of a pension must be received in Malta, which pension must constitute at least 75% of the beneficiary’s chargeable income. Applicants and their accompanying dependants must also be covered by a health insurance policy, providing coverage for all risks across the EU normally covered for Maltese Nationals.

The beneficiaries of such Scheme must be domiciled overseas, and cannot have the intention to establish their domicile in Malta within 5 years from the date of application for such special Tax Status. Moreover, applicants must not be in employment, or benefit under any other Malta scheme conferring a special tax status, and must hold a valid travel document.

Beneficiaries under this Scheme are, however entitled to hold a non-executive post on the board of a company resident in Malta, or partake in activities related to any institution, trust or foundation of a public character, or any similar organization or body of persons, also having a public nature, engaged in philanthropic, educational or research and development work carried out in Malta.

An important point to note is that beneficiaries of this Scheme must spend in excess of 90 days per calendar year in Malta, averaged over a period of 5 years, and may not spend more than 183 days in any other foreign jurisdiction. Finally, applicants must satisfy a fit and proper test set by the pertinent Maltese Authorities.

The above-mentioned qualifying criteria must be complied with on a yearly basis. Therefore, beneficiaries must retain their properties or leases as per the above requirements annually, renew their pertinent health insurance policies on a yearly basis, and comply with the minimum stay requirements as outlined above each year of their holding this Special Tax Status.

Application for this Special Tax Status, which will apply to individuals in receipt of a pension, is subject to a fee of €2,500 payable to the Maltese authorities, and may only be done through the services of an Authorised Registered Mandatory (ARM). EMD, as a licenced ARM, may assist you throughout the entire application process, as well as with the compliance obligations required by the Scheme.

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