The Residence Programme of Malta is an attractive residence programme of Malta, designed for EU & EEA or Swiss nationals. This programme is an alternative programme to the Global Residence Programme of Malta, regulated under S.L.123.160. This programme allows EU & EEA nationals to transfer their tax residence to Malta – a safe and tax-efficient jurisdiction.
The Malta Residence Programme (TRP) provides economically self-sufficient citizens of EU/EEA with the right to take up the residence status in Malta with exceptional tax regime. Maltese residents under this programme are entitled to taxation at the flat rate of 15% on the foreign source income remitted to Malta. Whereas the minimum annual tax liability is EUR 15,000.
Favourable tax status under The Residence Programme of Malta
Beneficiaries of The Residence programme (TRP) of Malta are granted with a “special tax status”.
The status applies to both beneficiary and his dependants on the payment of their income tax, where the base tax rate applicable to any income received by the beneficiary in Malta arising outside of Malta will be fixed at a rate of 15%.
The minimum tax that the beneficiary must pay annually is set at Euro 15,000 per annum. This minimum tax covers income of the beneficiary and his / her dependants that arises outside Malta and is received in Malta and does not include income that arises in Malta.
Any income, which does not fall under the aforementioned regulation, will be taxed at a fixed rate of 35% in accordance with the Malta Income Tax Act rules.
Eligibility criteria under The Residence Programme Rules
The Residence Programme (TRP) is designed exclusively for:
EU,
EEA, and
Swiss nationals.
Thus, people who are non-EU citizens are not eligible for this programme. However, they can apply for the alternative Global residence programme.
Furthermore, applicants for the Global Residence Programme of Malta should satisfy the programme requirements as set in S.L. 123.160 (further amended by L.N. 69 of 2020):
The applicant does not benefit from any other Maltese tax programme.
Applicant owns or rents a qualifying property in Malta as his principal place of residence worldwide. The property considered as qualifying if:
Applicant is in receipt of stable and regular resources which are sufficient to maintain himself and his dependents without recourse to the social assistance system in Malta;
Applicant is in possession of a valid travel document;
Applicant is in possession of valid health insurance covering him and his dependants across all European Union member states;
Applicant can adequately communicate in one of the official languages of Malta.
Annual obligations
The beneficiaries of The Residence programme, once the Special Tax status is granted under The Residence Programme rules must comply with the following ongoing obligations:
Maintain qualified owned or leased property at all time;
Maintain the required health insurance;
Submit the Annual Declaration together with the income tax return;
Do not spend more than 183 days a year in any other jurisdiction;
Be able to comply with all special reporting and notification requirements.
Can the special tax status be withdrawn?
A beneficiary of The Residence Programme of Malta will cease to benefit from this programme if he no longer satisfies any of the mandatory conditions of the programme. The special tax status will be terminated with immediate effect if:
- Beneficiary ceases to hold a Qualifying Property;
- Beneficiary becomes Maltese or a third-country national;
- Beneficiary becomes a permanent resident of Malta;
- Beneficiary violates any provisions of the Incomes Tax Act. Such breaches include:
- failure to comply with routine compliance obligations, such as cases of tax evasion and misrepresentation;
- Failure to respond to requests for information from the Commissioner of Revenue in a timely manner;
- Beneficiary and his dependants fail to hold the required health insurance at all time;
- Beneficiary resides in another jurisdiction for more than 183 days in a calendar year.
A special tax status may also be terminated if the beneficiary himself opts to withdraw from the special tax status by notifying the Commissioner for Revenue.
However, following the death of the beneficiary, the special tax status devolves onto his direct dependant who has inherited the main residence of the deceased (or rented a qualifying property immediately after the death of the deceased beneficiary). The dependant will only inherit the special tax status if he meets all the criteria required for the retirement programme and the Commissioner for revenue receives relevant documentation within 183 days from the death of the beneficiary.
Administrative Fee and Procedure
In order to apply for The Residence Programme of Malta, one must engage an Authorised Registered Mandatory (ARM), who will be liaising with the Commissioner for Revenue and submitting the application on behalf of the beneficiary.
SMM Consultancy Services is authorized to act as Authorised Registered Mandatary [ARM05114] by the CFR.
The application for the Global Residence Programme is subject to the government administrative fee of Euro 6,000 (except where the qualifying owned property is situated in the south of Malta, in which case the administrative fee is that of Euro 5,500).
SMM Immigration department
By applying for The Residence Programme of Malta, an EU/EEA/Swiss national is granted with a special tax status of 15% on income received in Malta.
Contact SMM Immigration team for personalized guidance and free consultation. We are always available for both face-to-face or online consultations, get in touch with our team and speak with one of our experts today.