Malta Retirement Programme Rules

The Malta Retirement Programme Rules (Legal Notice 317/2012) is a programme designed to attract nationals of the EU, EEA and Switzerland who are not in an employment relationship and who are in receipt of a pension as their regular source of income. The main benefit that is granted under the programme is that the individual will be entitled to reside in Malta and benefit from a fixed tax rate of 15% on all income remitted to Malta.

Eligibility to Apply

In order for a person to apply for special status in terms of the Malta Retirement Programme Rules (“MRP”), the individual must satisfy all of the following conditions:

• The applicant must own or rent a qualifying property in Malta*
• The applicant must not be a person who already benefits under any other residents programme in Malta
• The applicant must not be a Maltese national, or a third-country national;
• The applicant must be in receipt of a pension, as supported by documentary evidence, all of which is received in Malta and constitutes at least 75% of the beneficiary’s chargeable income
• The applicant must be in possession of health insurance which covers himself and his dependents in respect of all risks across the whole of the EU normally covered for Maltese nationals.
• The applicant must not be domiciled in Malta and must not intend to establish his domicile in Malta within 5 years from the date of the application for the special tax status;
• The applicant must be deemed to be a fit and proper person, and therefore, an international due diligence exercise shall be carried out prior to the granting of the special tax status

* An applicant is said to hold a qualifying property, if the said applicant owns an immovable property in Malta purchased for a value of not less than €275,000 (€250,000 if the property is situated in Gozo); or the said applicant rents an immovable property in Malta for not less than €9,600 per annum (€8,750 per annum if the property is situated in Gozo).

Registration Fee

A non-refundable one-off registration fee of €2,500 must be paid by the applicant upon submitting the application.

Continuing Obligations

An individual who has been granted the special tax status must comply with the following obligations on a yearly basis:

• The ‘Qualified Property Holding’ must be retained;
• The applicant must not become a Maltese national or a third country national;
• The applicant must retain the health insurance and continue to have stable resources;
• The applicant must not become domiciled in Malta;
• The applicant must reside in Malta at least 90 days a year averaged over any five year period; or must not reside in any other jurisdiction for more than 183 days;
• Special reporting obligations (the filing of an annual return together with the annual tax return) and notifications must be complied with.

Employment in Malta

Individuals benefitting from this programme may only hold a non-executive post on the board of a company resident in Malta.

This implies that the beneficiary would be prohibited from being employed by the company in any capacity. Such individuals may also partake in activities related to any institution, trust or foundation of a public character and any other similar organisation or body of persons, which are also of a public character, that is engaged in philanthropic, educational or research and development work in Malta.

Tax Treatment

• All foreign sourced income which has been remitted to Malta shall be taxable at 15%, with the possibility of claiming double tax relief on such income;
• The applicant must pay a minimum tax of €7,500 every year;
• A beneficiary with dependents must pay an additional €500 per year for every dependent and every special carer;
• Other chargeable income of the beneficiary will be charged to tax at the rate of 35%.