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The Residence Programme, 2014

By virtue of Legal Notice 270 of 2014, The Residence Programme Rules were introduced to replace the previous High Net Worth Individuals (EU/EEA/Swiss Nationals) rules. These rules are aimed to attract individuals who are nationals of the EU, EEA or Switzerland and who do not benefit from any other ‘Special Tax Status’ in Malta. Individuals benefitting from this Programme are not precluded from working in Malta. These rules shall be deemed to have come into force with effect from 1st July 2013.

Main Beneficiary

A beneficiary under the programme is an individual who is not a permanent resident of Malta and who proves to the satisfaction of the Commissioner of Inland Revenue that:


a)      He is an EU, EEA or Swiss national but is not a Maltese national;

b)      He is not a person who benefits under the Residents Scheme Regulations, the High Net Worth Individuals – EU /EEA / Swiss Nationals Rules, the High Net Worth Individuals – Non-EU / EEA / Swiss Nationals Rules, the Malta Retirement Programme Rules, the Global Residence Programme Rules, the Qualifying Employment in Innovation and Creativity (Personal Tax) Rules or the Highly Qualified Persons Rules;


c)       He holds a qualifying property holding;

d)      He is in receipt of stable and regular resources which are sufficient to maintain himself and his dependants without recourse to the social assistance system in Malta;


e)      He is in possession of a valid travel document;

f)       He is 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 dependants;

g)      He can adequately communicate in one of the official languages of Malta; and

h)      He is a fit and proper person.

 

Dependants

This legislation establishes that dependants of the main beneficiary are:


a)     The beneficiary’s spouse or person with whom the beneficiary is in a stable and durable relationship;

b)     Minor children, including adopted minor children and children who are in the care and custody of the beneficiary or the person mentioned in (a) above;

c)     Children who are under the age of twenty-five, including adopted children and children who are in the care and custody of the beneficiary or the person mentioned in (a) above. Such children must not be economically active;

d)     Children, including adopted children and children who are in the care and custody of the beneficiary or the person mentioned in (a) above, who are not minors but who are unable to maintain themselves because of circumstances of illness or disability of a serious gravity;

e)     Dependent brothers, sisters and direct relatives in the ascending line of the beneficiary or the person mentioned in (a) above.

 

Minimum Property Requirements

The beneficiary must own or rent a ‘Qualifying Property Holding’ which the individual occupies as his principal place of residence. The value of the property has to be as follows:
 

  • Owned Immovable property situated in Malta other than in the south of Malta - €275,000
  • Owned Immovable property situated in the south of Malta and in Gozo - € 220,000
     
  • Rented Immovable property situated in Malta other than in the south of Malta - €9,600 per annum
  • Rented Immovable property situated in the south of Malta and Gozo - € 8,750 per annum

 

Tax Treatment and Minimum Tax Requirement

A rate of 15% shall apply on any income arising outside Malta in the year immediately preceding the year of assessment which is received in Malta (including income arising outside Malta and received in Malta during the whole of the year in which the special tax status was granted) by the beneficiary, the beneficiary’s spouse and children with the possibility to claim double taxation relief, provided that the minimum amount of tax payable in terms of this programme is paid.

This Programme establishes that the minimum tax payable is €15,000. The minimum tax payable is due in advance every year, and shall be payable before the 30th of April. Such payment shall be accompanied by a return made to the Commissioner that provides proof that all conditions and requirements have been satisfied. Such return is not required in the year in which the special tax status is granted.

In the case where the special tax status is granted after 30th April, the minimum tax shall be paid before the special tax status is granted. Any tax paid shall not be refundable.

Income of a beneficiary, the beneficiary’s spouse and children that is not chargeable to tax under the 15% tax rate, shall be charged to tax as separate income at the rate of 35%.

 

Application Fee and Authorised Registered Mandatory (ARM) Requirement

An individual, represented by an Authorised Registered Mandatory, may apply to the Commissioner for a special tax status by paying a non-refundable administrative fee of €6,000 upon application or €5,500 where the qualifying owned property is situated in the South of Malta.

We are registered and approved by the local tax authorities to act as an Authorised Registered Mandatory (ARM).