Malta amends Special Tax Status Residence Rules for non-EU/EEA/

Dr. Trudy Marie Attard | Published on 21 Feb 2012

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The High-Net Worth Individuals – Non-EU/Non-EEA/Non-Swiss Nationals Rules, 2011 have been amended on the 27th January 2012 through L.N. 42 of 2012. The rules introduced a residence status attracting favourable tax treatment in Malta where the individuals satisfy a number of statutory requirements.

Long-term Residents

In relation to the beneficiary of the status, the amendments disqualify individuals who are already long term residents from applying for the status. Further, the conditions requisite for an individual to successfully apply for the status add that in the case of a person who declares that he does not intend to become a long-term resident, he does not spend more than nine months in Malta in any calendar year.

Minimum Residence Rule Removed

As regards exclusion from eligibility of the state, the condition that an individual under the status cannot continue benefitting from it if he resides in Malta for less than ninety days has been removed and replaced by the condition that status shall no longer apply to a person who had declared that he does not intend to become a long-term resident and spends more than nine months in Malta. Further, an individual relinquishes eligibility if he had declared that he intended to become a long-term resident, is granted a long-term residency status and ceases to be a party to the qualifying contract. The requirement not to spend 183 days in another jurisdiction remains, however the obligation to provide documentary proof to this effect has been removed.

Rental or Purchase of Residence

One of the most important requirements to be satisfied for eligibility for the residence status is the ownership of qualifying owned property or the lease of qualifying rented property. Pursuant to the amendments, property is also deemed to be qualifying owned property where it was purchased after 1st January 2011, thus widening the bracket and including property purchased between January and 14th September 2011.

In addition, in an amendment expanding the definition of a qualifying rented property, the Commissioner of Inland Revenue has the discretion to accept as qualifying rented property a property covered by a lease agreement dated before 14th September 2011 where:

  1. the property is rented for not less than €4,150 per annum
  2. by a person who filed an application under the Residents Scheme Regulation which was received by the Commissioner by the 14th September 2011, 
  3. a copy of the relative lease agreement, attested by a notary or advocate, is deposited with the Commissioner by not later than 31 March 2012.  

Authorised Mandatories

The list of persons of the authorised mandatories representing the individuals applying for the High Net Worth Individuals residence status has been broadened. It now includes also a member of the Malta Institute of Management and any entity of which at least 75% (directly or indirectly) of its shareholders, partners or other members are warranted persons or members of the mentioned institutes, as broadened.

The above amendments are deemed to be effective from the date of the High-Net Worth Individuals – Non-EU/Non-EEA/Non-Swiss Nationals Rules, that is, 1st January 2011 so that the rules are to be henceforth applied as amended.

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Dr Jean-Philippe Chetcuti

Senior Partner, Tax & Immigration

+356 22056111

Dr Priscilla Mifsud Parker

Senior Partner, Corporate, Tax & Immigration

+356 22056122

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