Advantageous tax scheme for European citizens intending to retire in Malta announced

Malta has announced the introduction of the Malta Retirement Programme, a new tax programme for retirees from EU/EEA/ Swiss nationals to take up residence in Malta.

The applicable rate shall be a fixed rate of tax of 15% with a minimum tax liability of €7,500 onto which €500 must be added for a dependent.

An applicant:

–          Must prove that he or she is not a threat to public health, public policy or public security;

–          Must prove that he or she is either on the EU transposition of rights or have medical insurance; and

–          Be in receipt of a recognised pension.

An applicant may hold a non-executive post on the board of a company registered in Malta or partake in activities related to any institution, trust or foundation of a public character which is engaged in philanthropic, educational, research and development work in Malta.

The minimum requirements for Gozo are less than the ones for Malta. Retirees have to spend a minimum of €275,000 on a property in Malta but €250,000 in Gozo, or if renting the minimum amount must be €9,600 for Malta and €8,750 for Gozo.

Applicant shall have to spend a minimum of 90 days in Malta per annum averaged over a five year period. They must also not be in any other single jurisdiction for more than 183 days.

The entire pension would have to be remitted and taxed in Malta (thus not allowing split income and paying minimum tax as happened with the previous Residence Scheme)

75% of the income chargeable to tax in Malta would have to arise from pension or similar income. The term ‘pension’ has been given a wide definition to include lifetime annuities, personal pension plans, occupational pension.

The Malta Retirement Programme is a tax status and the applicant would first have to complete the formalities of a Registration Certificate (EU citizens). Moreover, the applicant would have to produce a Conduct Certificate and make an affidavit that he/she does not have any on-going civil or criminal proceedings.

The Programme also caters for carers that may want to accompany applicants to Malta.

The application fee amounts to €2,500.