There are a number of Residency schemes in place in Malta granting special tax statuses to individuals looks to take up residency in Malta. The High Net Worth Individuals Residency Scheme and the Retirement schemes have attracted many expats to our shores.
About Tax and the Global Residency Program
Some of our properties/developments have SDA - which is when non EU citizens don't need an AIP permit to purchase property. Our team will be more than happy to provide you with further information you may require on the schemes available in Malta or put you in contact with professional tax advisors.
The Government of Malta has recently launched the Global Residence Program which provides favourable tax incentives to non-EU, non-EEA and non-Swiss Nationals who decide to take up residence in Malta or its sister island Gozo. Non-EU Nationals will be able to live in Malta or Gozo with their families in a property which they can either buy or rent. They will then be able to acquire a tax residence permit and benefit from the reduced tax rates.
Global Residence permit holders are not legally bound by minimum stay requirements. However, they are not permitted to spend more than 183 days in another jurisdiction. The most salient features of the Global Residence Program are as follows.
In order to qualify for residency under the GRP, the following conditions must apply:
- Property purchased in the island of Malta must have a minimum value of €275,000;
- Property purchased in the island of Gozo or in the South of Malta must have a minimum value of €220,000;
- If the applicant opts to rent a property instead of purchasing it, the property must have a minimum annual rental value of €9,600 (or €800 a month) in Malta and €8,750 (or €730 a month) in Gozo or in the South of Malta.
- A GRP holder will be subject to an annual flat tax rate of 15% on any income declared in Malta, with a minimum tax of €15,000 payable to the Inland Revenue Department every year in advance;
- GRP holders and their respective dependents must also take out a health insurance. They will not be eligible to benefit from Malta's free State healthcare system;
- Upon application, a standard fee of €6,000 is payable if a property is purchased in Malta and €5,500 if the property is purchased in Gozo or in the South of Malta;
- GPR holders will be entitled to work or to set-up business in Malta but will be taxed at a flat rate of 35% on income arising in Malta.
- GPR holders are not permitted to stay more than 6 months a year in another jurisdiction.
We will be able to assist any client that you might have by giving further information and/or fixing a meeting with a top law firm specializing in Tax management.
Benefits of the Global Residence Programme
Beneficiaries of a Special Tax Status under the Global Residence Programme (GRP) enjoy a flat rate of personal income tax of 15%, chargeable only on a remittance basis. Foreign source income received in Malta is subject to Malta tax only if remitted to Malta while foreign capital gains are altogether outside the scope of tax in Malta. Local source income arising from business, investment or other economic activity held in Malta is subject to tax at 35%. Minimum tax under the present High Net-Worth Individuals (HNWI) Scheme has been reduced from €25,000 for the applicant (plus an additional €5,000 per dependent) to a minimum tax of €15,000 under the GRP, covering all dependents.
Applicants must also take out an all-risks medical insurance – they will not be eligible to benefit from Malta's free State healthcare system;
The definition of dependents has been widened from that under the HNWI scheme. The age limitation of children (natural, adopted or in care) has been increased to 25. Dependents now includes brothers, sisters and direct relatives in an ascending line as long as it is shown to the satisfaction of the Director of Inland Revenue that these are dependents of the beneficiary of the GRP. Certain employees are also provided for including carers, butlers, personal drivers and other domestic staff in the employment of the applicant for the preceding two years.
Applying for Special Tax Status under the GRP
Special Tax Status under the GRP Rules must be applied for, through an Authorised Registered Mandatory and the non-refundable application fee is of €6,000 Euro and €5,500 if the qualifying property is in the south of Malta.
The GRP Rules state that the beneficiary must continuously satisfy the obligations in terms of the Rules and also that the special tax status may be inherited.