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Malta – Attractive Residence Programmes and Tax Benefits for Expatriates

By June 28, 2021 No Comments
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Background

Malta offers 5 residence programmes to meet different individual circumstances. Some are appropriate for non-EU individuals while others provide an incentive for EU residents to move to Malta.

The residence programmes and the tax benefits they can provide for individuals, where relevant, are detailed below.

  1. MALTA PERMANENT RESIDENCE

The Malta Permanent Residence programme is available to non-EU individuals and enables them to reside indefinitely in Malta.

There are two options with regards to this programme:

Option 1: Rent a property and pay the full contribution:

  • Pay the €40,000 non-refundable administrative fee; AND
  • Rent a property with a minimum of €12,000 per year (€10,000 if the property is situated in Gozo or the south of Malta); AND,
  • Pay the full Government contribution of €58,000; AND
  • Make a donation of €2,000 to a local philanthropic, cultural, scientific, artistic, sport or animal welfare NGO registered with the Commissioner of Voluntary Organisations.

Option 2: Purchase a property and pay a reduced contribution:

  • Pay the €40,000 non-refundable administrative fee; AND
  • Purchase a property with a minimum value of €350,000 (€300,000 if the property is situated in Gozo or the south of Malta); AND,
  • Pay the reduced Government contribution of €28,000; AND
  • Make a donation of €2,000 to a local philanthropic, cultural, scientific, artistic, sport or animal welfare NGO registered with the Commissioner of Voluntary Organisations.

An additional Government Contribution of €7,500 is required for each additional adult dependant (excluding the spouse) included in the application.

Applicants must show capital assets of not less than €500,000, out of which a minimum of €150,000 must be financial assets.

  • Tax Advantages Available to Individuals

Individuals, taking advantage of this programme, who are not of Maltese origin and intend to stay in Malta for some considerable time but do not intend to permanently establish themselves in Malta, will be classified as resident but not domiciled in Malta.

Such individuals will be taxed on Malta source income and certain gains arising in Malta. They will not be taxed on non-Malta source income not remitted to Malta. Capital gains will not be taxed even if they are remitted to Malta.

  1. GLOBAL RESIDENCE PROGRAMME

The Global Residence Programme entitles non-EU nationals to obtain a Maltese residence permit through a minimum investment in property in Malta.

Successful applicants can relocate to Malta if they choose to do so. They also have the right to travel to any country within the Schengen Zone of countries without the need for an additional visa(s).

To qualify for the scheme an individual must purchase property costing a minimum of €275,000 or pay a minimum of €9,600 per annum in rent. If the property is in Gozo or the south of Malta the minimum property value is €250,000 or €220,000 respectively, or a minimum rent payment of €8,750 per annum is required. In addition, an applicant must not spend more than 183 days in any other jurisdiction in any single calendar year.

  • Tax Advantages Available to Individuals – Global Residence Programme

A flat rate of 15% tax is charged on foreign income remitted to Malta, with a minimum amount of €15,000 tax payable per annum (income arising in Malta is taxed at a flat rate of 35%). This applies to income from the applicant, his/her spouse and any dependants jointly.

Foreign source income not remitted to Malta is not taxed in Malta.

Individuals may also be able to claim double taxation relief under the regime.

  1. THE MALTA RESIDENCE PROGRAMME

The Malta Residence Programme entitles EU nationals to obtain a Maltese residence permit through a minimum investment in property in Malta.

To qualify for the scheme an individual must purchase property costing a minimum of €275,000 or pay a minimum of €9,600 per annum in rent. If the property is in Gozo or the south of Malta the minimum property value is €250,000 or €220,000 respectively, or a minimum rent payment of €8,750 per annum is required. In addition, an applicant must not spend more than 183 days in any other jurisdiction in any single calendar year.

  • Tax Advantages Available to Individuals – Global Residence Programme

A flat rate of 15% tax is charged on foreign income remitted to Malta, with a minimum amount of €15,000 tax payable per annum (income arising in Malta is taxed at a flat rate of 35%). This applies to income from the applicant, his/her spouse and any dependants jointly.

Foreign source income not remitted to Malta is not taxed in Malta.

Individuals may also be able to claim double taxation relief under the regime.

  1. HIGHLY QUALIFIED PERSONS PROGRAMME

The Highly Qualified Persons Scheme is directed towards professional individuals earning over €86,938 per annum (basis year 2021), employed in Malta on a contractual basis.

This scheme is open to EU nationals for five years and to non-EU nationals for four years. A list of qualifying positions is available on request.

  • Tax Advantages Available to Individuals – Highly Qualified Persons Programme

Income tax is set at a flat rate of 15% for qualifying individuals (instead of paying income tax on an ascending scale with a current maximum top rate of 35%).

No tax is payable on income earned over €5,000,000 relating to an employment contract for any one individual.

  1. RETIREMENT PROGRAMME

The Malta Retirement Programme is available to EU and non-EU nationals whose main source of income is their pension.

An individual must own or rent a property in Malta as his/her principal place of residence in the world. The minimum value of the property must be €275,000 in Malta or €220,000 in Gozo or south Malta; alternatively, property must be leased for a minimum of €9,600 annually in Malta or €8,750 annually in Gozo or south Malta.

In addition, there is a requirement for an applicant to reside in Malta for a minimum of 90 days each calendar year, averaged over any five-year period. Individuals must not reside in any other jurisdiction for more than 183 days in any calendar year during which they benefit from the Malta Retirement Programme.

  • Tax Advantages Available to Individuals – The Retirement Programme

An attractive flat rate of 15% tax is charged on a pension remitted to Malta. The minimum amount of tax payable is €7,500 per annum for the beneficiary and €500 per annum for each dependant.

Income that arises in Malta is taxed at a flat rate of 35%.

How Can Dixcart Assist?

Dixcart can assist in providing advice as to which programme would be most appropriate for each individual or family. We can also organise visits to Malta, make the application for the relevant Maltese residence programme, assist with property searches and purchases and provide a comprehensive range of individual and professional commercial services once relocation has taken place.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-21