Amendments to the High Net Worth Individuals Rules for EU/EEA/S

Dr. Jean-Philippe Chetcuti | 07 Feb 2012

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The High-Net Worth Individuals – EU/EEA/Swiss Nationals Rules, 2011 have been amended on the 27th January 2012 through L.N. 41 of 2012. The rules introduced a residence status attracting favourable tax treatment in Malta where the individuals satisfy a number of statutory requirements.

Minimum stay requirement of 90 days removed

A number of important amendments were made to the list of conditions that would terminate the individual’s eligibility for the status. An individual benefitting from the status need no longer reside in Malta for at least ninety days in a calendar year so that there is no restriction as to the length of that person’s physical presence in Malta. The requirement not to spend 183 days in another jurisdiction remains, however the obligation to provide documentary proof to this effect has been removed.

Administrative Provisions

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.

Long-Term Residents

Further, the denial of eligibility to an individual with the status of a long-term resident has been removed. The definition of a long term resident has also been removed.

Transitional Rules re Qualifying Property

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.  

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

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