The Malta Retirement Programme Rules, enacted by Legal Notice 317 of 2012 introduces a new Malta Special Tax Status for EU/EEA/Swiss individual pensioners. These Malta Retirement Programme rules, are subject to a number of criteria, entitle successful applicants to a Special Tax Status.
Maltese residents enjoying special tax status under the Malta Retirement Programme are subject to tax at a flat rate of 15% on foreign-sourced income, subject to a minimum tax payment (below) and with the possibility to claim double tax relief. The application for Special Tax Status must be undertaken on behalf of an applicant by an Authorised Registered Mandatory and is subject to a fee of €2,500.
Malta Retirement Programme - Beneficial Tax Treatment
The beneficiary pays tax at 15% on income arising outside of Malta which is received in Malta with the possibility to claim double tax relief while any income arising in Malta is subject to tax at 35%.
Malta Retirement Programme - Eligibility
- hold a qualifying property occupied only by the applicant, family members and/or carers:
- purchased after 1st January 2011 situated either in Malta for a value of €275,000 or situated in Gozo for a value of €250,000;
- Special concession: where the property is purchased before 1st January 2011, such value as at date of application should not be lower than the above mentioned values (architects evaluation must be produced)
- or rents a qualifying property of at least €9,600 per annum for a property situated in Malta or €8,750 per annum for a property situated in Gozo;
- Receive the whole amount of a pension in Malta, which pension constitutes at least 75% of the beneficiary’s chargeable income;
- not be a national of Malta or a third country;
- not be domiciled in Malta and does not intend to establish his domicile in Malta within 5 years from application date;
- not benefit under any other Malt Special Tax Status or be in employment;
- Be in possession of sickness insurance in respect of all risks across the whole of the European Union normally covered for Maltese Nationals for himself and his dependents;
- Be in possession of a valid travel documents;
- Be a fit and proper person.
Minimum Malta Tax
- Minimum tax of €7,500;
- An additional minimum tax of €500 per dependant and every special carer.
Malta Retirement Programme - Annual Obligations
In order to maintain one's special tax status, a Malta retirement programme status holder needs to:
- Retain qualifying property holding (as defined above);
- Retain the necessary insurance;
- Retain in Malta for more than 90 days a year averaged over a period of five years;
- Not stay in any other jurisdiction for more than 183 days;
- Adhere to all special reporting obligations and notifications.
Application Process for the Malta Retirement Programme
Applications for special tax status under the Malta Retirement Programme rules are to be made to the Government of Malta through any Maltese Authorised Registered Mandatory. Chetcuti Cauchi Advisors Ltd is authorised and regulated by the Government of Malta to handle and submit applications for residence permits under the various residence programmes available under Maltese Law.
Chetcuti Cauchi’s Immigration Services
Chetcuti Cauchi enjoys a sterling reputation in the areas of citizenship and residence planning and in the handling of legal and tax matters relevant to the structuring and planning of personal wealth and personal interests and business worldwide. Our Citizenship & Residence Planning team is led by partners Dr Jean-Philippe Chetcuti and Dr Priscilla Mifsud Parker.
Jean-Philippe acts as the firm’s managing partner and serves as the Chairman of STEP, the Society of Trust & Estate Practitioners and on the executive committee of IFSP, the Institute of Financial Services Practitioners. Jean-Philippe co-founded and acts as secretary of the Malta Association of Family Enterprises, which he represents at the European Family Business.
Priscilla is a private clients lawyer specialising in immigration law and in trusts and estates. She is a member of the Maltese Chamber of Advocates and serves as Technical Chair of STEP.