The Malta Retirement Programme Rules introduce a new Malta Special Tax Status for EU/ EEA/ Swiss individual pensioners who remit their pension into Malta.

Applicant

  • EU nationals/ EEA nationals/ Swiss nationals
  • Not in an employment relationship
  • In receipt of a pension as the regular source of income

Concessions

  • Applicant may hold a non-executive post on the board of a company resident in Malta, however, the beneficiary is prohibited from being employed by the company in any capacity
  • Applicant may partake 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

Dependants

The term dependants shall be construed to mean the following:

  • Applicant’s spouse
  • Person with whom the beneficiary is in a stable and durable relationship, comprising permanent cohabitation, tied by bonds of mutual affection and mutual dependency
  • Applicant’s unmarried children
  • Adopted children under the age of 18
  • Children who are in the custody of the applicant or his/her spouse and such children are financially dependent on the applicant.
  • Children of the applicant or his/her spouse who are over 18 years of age but who because of circumstances of illness or disability of a serious nature are unable to maintain themselves

Eligibility Criteria

All the following Eligibility Criteria must be satisfied by the Applicant:

  1. Owns or rents an immovable property which the individual occupies as his principal place of residence worldwide:
    1. Purchasing a property:
      1. If the immovable property is situated in Malta, its minimum value must be of not less than €275,000
      2. If the immovable property is situated in Gozo, its minimum value must be of not less than €250,000

      If the property was bought after the 1st January 2011 and for a sum which is less than the abovementioned values, the property may satisfy the requirement if;

      1. The applicant declares that the property was bought for an amount less than that indicated above, and
      2. Such declaration is accompanied by:
        • A separate and independent architect valuation of the property
        • Architect’s plan of the property
    2. Renting a property
      1. If the immovable property is situated in Malta, its minimum annual rent must be of at least €9,600
      2. If the immovable property is situated in Gozo, its minimum annual rent must be of at least €8,750

  2. Is not a beneficiary in terms of the following regulations:
    1. Other Residents Scheme Programmes
    2. High Net Worth Individual Rules
    3. Highly Qualified Persons Rules

  3. Is an EU national/ EEA national/ Swiss national.

  4. Is in receipt of a pension.
    The term pension is construed to mean:
    1. Periodic payments paid in respect of past employment (Including for the rendering of services to a State, political division or local authority of the state).
    2. Remunerations paid as lifetime or temporary annuities
    3. Regular income from an occupational retirement scheme, personal overseas retirement plan or insurance policies

      The term pension excludes the receipt of a lump sum payment or any capital sum received by way of commutation of pension, retiring or death gratuity.
      The pension must be wholly received in Malta and needs to constitute at least 75% of the applicant’s chargeable income for any particular tax year.

  5. Possesses:
    1. A valid travel document
    2. A sickness insurance which covers himself and his dependants in respect of all risks across the EU normally covered for Maltese nationals.

  6. Is not domiciled in Malta and does not intend to establish his domicile in Malta within five years from the date of application.

  7. Is a fit and proper person – this necessitates the submission of an updated police conduct certificate and a sworn declaration confirming that the individual was not found guilty of any civil or criminal proceedings. In the eventuality of guilt, the applicant is to submit details of the conviction.

  8. Has applied for a Registration Certificate in Malta in terms of the Free Movement of European Union Nationals and Their Family Members Order (S.L. 460.17) and a copy of the acknowledgment or Residence Card is to be submitted.

Tax Treatment

  • The beneficiary will be subject to a tax rate of 15% on any income received in Malta from foreign sources by the beneficiary or his dependants.
  • Other chargeable income is taxed at the rate of 35%. This may include bank interest received from a local source or dividends received from a company registered in Malta – this income may not exceed 25% of the applicant’s chargeable income.
  • A minimum tax of €7,500 must be paid annually together with an additional €500 for every dependent or special carer. The minimum tax for the first year will be payable not later than the tax return date.
  • In the first year the beneficiary will not be subject to provisional tax.
  • The beneficiary retains the right to request a claim for relief of double taxation. Provided that if including any credit for relief of double taxation, is such that amounts less to the prescribed minimum, the minimum sum will have to be paid.
  • The 15% tax rate does not apply to special carers. Special carers are subject to the progressive tax rates.

Cessation of Special Tax Status

  1. By choice of the beneficiary
  2. Default of the Income Tax Acts
  3. Failure in connection with the conditions that need to be satisfied through the special tax status
    • Ceases to hold a qualifying property;
    • Becomes a Maltese national;
    • Does not remain a citizen of an EU member state, Iceland, Norway, Liechtenstein or Switzerland;
    • Fails to receive in Malta all the pension indicated in the documentary evidence;
    • Is not in possession of sickness insurance;
    • Establishes his domicile in Malta;
    • Acquires a permanent residence certificate in terms of the Free Movement of European Union Nationals and Their Family Members Order;
    • The stay of the beneficiary is not deemed to be I the public interest by the Minister of Justice;
    • If the individual resides in Malta for less than 90 days a year over any 5 year period;
    • Stays in any other jurisdiction for more than 183 days in a calendar year.

Administrative Fee

A non-refundable administrative fee of €2,500 is to be paid upon application

 

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