The new Residence Programme Rules, Legal Notice 270 of 2014 (hereinafter the ‘Rules’) have recently been published in Malta and have come into force with effect from 1st July 2013. The Rules apply to any EU, EEA or Swiss national, who is not a Maltese national or who benefits under another residence scheme in Malta, or an individual who is a permanent resident of Malta (hereinafter ‘beneficiary’) who qualify for the special tax status in terms of the Rules.
In order for a beneficiary to be registered in terms of the Rules, such person would be required:
- to hold a qualifying owned property, which in terms of the Rules may refer either to the purchase of an immovable property at a consideration of not less than Euro 275,000 for a property situated in Malta; albeit if the property is situated in the south of Malta or in Gozo, the amount is reduced to Euro 220,000. Alternatively, a qualifying rented property may refer to a property taken on at lease which is not less than Euro 9,600 per annum for a property situated in Malta or Euro 8,750 per annum for a property situated in the south of Malta or in Gozo.
- to be in receipt of stable and regular resources, which are sufficient to maintain himself and any person dependant on him.
- To be in possession of a valid travel document;
- To be in possession of a sickness insurance covering risks all over the European Union, both for himself and for any person dependant on him.
- Be fluent in one of the official languages of Malta and
- Be fit and proper person.
Special Tax Status
A beneficiary would be subject to pay income tax at a rate of 15% on income arising outside of Malta and remitted to Malta, provided that a minimum amount of tax of Euro 15,000 is paid in every year of assessment by not later than the 30th April of each year. Any other income arising in Malta which is not chargeable to tax under the Rules shall be charged as separate income at the rate of 35%.
A beneficiary should appoint an authorised mandatary in terms of the Rules to represent such person and apply for special tax status under the Rules. A non-refundable fee of Euro 6,000 shall be payable upon application; provided that any application made in respect of which the qualifying property held is situated in the south of Malta or in Gozo, the non-refundable administrative fee shall be Euro 5,500.
Cessation of Special Tax Status
A beneficiary shall cease to possess special tax status under these Rules, in the event that:
- The beneficiary becomes a Maltese or a third country national;
- The beneficiary does not continue to hold a qualifying property holding, including if the individual lets or sublets the qualifying property holding;
- The beneficiary becomes a permanent resident of Malta;
- The beneficiary no longer possesses a sickness insurance as specified above;
- The beneficiary’s stay is not in the public interest;
- The beneficiary stays in another jurisdiction for more than 183 days in a calendar year.In the occurrence of any of the above cases, notification should be made to the Commissioner for Revenue and in default an administrative penalty of Euro 5,000 shall be charged.At Integritas, we can assist you in the procedure to be registered under the Rules. Kindly contact us for more details.