Amendments to some of Malta’s forefront Tax Residence Programmes

Amidst the COVID-19 pandemic, on the 17^th of March 2020, the parliament of Malta convened to pass a number of legal notices, one of which was to amend the various tax residence programmes established in Malta, namely, the Malta Retirement Programme, the Global Residence Programme, the Residence Programme and the United Nations Pensions Programme.

The Malta Retirement Programme is the programme which has seen a major change out of all the aforementioned programmes. Previously, the Malta Retirement Programme was only applicable to EU, EEA and Swiss nationals. By virtue of legal notice 69 of 2020, the Malta Retirement Programme is now applicable to all nationalities alike, including third country nationals, except for Maltese nationals.

Since third country nationals may now also apply and become beneficiaries of the Malta Retirement Programme which provides for a flat rate of 15% taxation on any income sourced outside of Malta and received in Malta, with a provisional minimum tax of €7,500 per annum, the respective Rules have been amended to also accommodate for long-term residence for third country nationals, similar to the permanent residence available for EU, EEA and Swiss nationals. More importantly, it must be noted that beneficiaries of the Malta Retirement Programme who obtain permanent residence and long-term residence, shall be taxable on any income accruing in or derived from Malta or elsewhere, and whether received in Malta or not and subject to tax at the staggered tax applicable to residents of Malta. This was previously only applicable in relation to beneficiaries obtaining permanent residence.

The other amendment which the legal notice has catered for is applicable to the other aforementioned tax residence programmes, that is, the Global Residence Programme, the Residence Programme and the United Nations Pensions Programme. This amendment takes into consideration the transfer of the tax status on the demise of a beneficiary of one of the tax residence programmes. The legal notice states that the tax residence status under the respective programme shall be transferred to the dependant of the deceased beneficiary who has inherited the property that was the beneficiary’s primary residence, or who rents a qualifying rented property immediately after the passing of the said beneficiary, and satisfies all other minimum requirements as set out by the respective tax residence programme, in such a manner as the Minister of Finance may determine further to consultation with the Commissioner for Revenue.

Should you require any assistance with any Malta tax residence programmes, please contact CSB Group at [email protected]