Residence in Malta

General – the jurisdictional rules under the Maltese law

As outlined under the section Jurisdiction to tax persons who are both ordinarily resident and domiciled in Malta are taxable on their worldwide chargeable income and capital gains. On the other hand persons who are domiciled but not ordinarily resident in Malta and persons who are not domiciled but ordinarily resident are taxable on their income arising in Malta and on their foreign source income which is remitted to Malta. However, such persons are not taxable on any capital gains arising outside Malta notwithstanding that such gains may have been remitted to Malta.  Persons who are not ordinarily resident and not domiciled in Malta are taxable on any income arising in Malta.


Global Residence Programme Rules and other rules

Besides Malta’s attractive lifestyle, high standard of living and robust legal and regulatory framework, individuals opting to take up residence in Malta may benefit from other fiscal incentives provided under various rules under the Maltese tax laws:

(i) Global Residence Programme Rules;

(ii) Residence Programme Rules 2014;

(iii) Highly Qualified Persons Rules;

(iv) Malta Retirement Programme Rules;

(v) Qualifying Employment in Innovation and Creativity (Personal Tax) Rules


Global Residence Programme Rules

1. The special tax status

The Global Residence Programme Rules (“GRR”) offer significant tax incentives to high net worth individuals that satisfy the criteria provided therein. Individuals that satisfy the requirements under the GRR and qualify as beneficiaries under such rules acquire the special tax status and benefit from the 15 percent tax rate on any income arising outside Malta and that is derived by the beneficiary, his spouse and minor children or children under his custody if such income is remitted to Malta. Beneficiaries may also claim double tax relief on such income provided that such beneficiaries pay a minimum amount of tax equivalent to €15,000 after claiming double tax relief in respect of income arising outside Malta per year of assessment. The GRR provide that any other income of the beneficiary which is not chargeable to tax at the reduced rate of 15% is charged to tax at the rate of 35%.

2. Who may qualify as a Beneficiary under the GRR?

An individual may qualify as a Beneficiary under the GRR if such person:

(i) is not a long-term resident;

(ii) is a third country national and is not a Maltese, EEA or Swiss national;

(iii) is not a beneficiary under any of the following:

(iv) holds a qualifying property holding;

(v) is in receipt of stable and regular resources which are sufficient to maintain himself and his dependants without  recourse to the social assistance system in Malta;

(vi) is in possession of a valid travel document;

(vii) is in possession of sickness insurance in respect of all risks across the whole of the European Union normally covered for Maltese nationals for himself and his dependents;

(viii) is fluent in one of the official languages of Malta; and

(ix) is a fit and proper person.


The GRR provide that a person is deemed to hold a qualifying property holding if such person:

(a) Owns any immovable property situated in Malta and such immovable property was acquired for a consideration of not less than €275,000 (or not less than €220,000 if the immovable property is situated on the island of Gozo or in the south of Malta); or

(b) Leases a property situated in Malta for not less than €9,600 per annum (or not less than €8,750 per annum if the immovable property is situated on the island of Gozo or in the south of Malta),

and, in either case, occupies such property as his primary residence provided that the persons who reside in the qualifying property are not persons other than the beneficiary, his dependants and household staff.

In this respect the GRR provide a list of localities that are deemed to fall within the south of Malta for the purposes of the above condition.

The GRR define the term “dependant” as:

(a)  the beneficiary’s spouse or person with whom the beneficiary is in a stable and durable relationship;

(b) minor children including adopted minor children and children who are in the care and custody of the beneficiary or the person mentioned in paragraph (a) above;

(c) children who are under the age of twenty-five, including adopted children and children who are in the care and custody of the beneficiary or the person mentioned in paragraph (a) above, provided that such children are not economically active;

(d) children including adopted children and children who are in the care and custody of the beneficiary or the person mentioned in paragraph (a) above, who are not minors but who because of circumstances of illness or disability of a serious gravity, are unable to maintain themselves;

(e) dependent brothers, sisters and direct relatives in the ascending line of the beneficiary or the person mentioned in paragraph (a) above

and in any case –

(i) is not a beneficiary under the Residents Scheme Regulations, the High Net Worth Individuals – EU / EEA / Swiss Nationals Rules, the Malta Retirement Programme Rules, the Qualifying Employment in Innovation and Creativity Rules or the Highly Qualified Persons Rules; and

(ii) resides with the beneficiary in the qualifying property.

An individual shall (with effect from the date on which he acquired the special tax status) cease to possess the special tax status if at any time such individual ceases to satisfy any of the conditions listed above. An individual will also cease to possess the special tax status if such individual’s stay is not in the public interest or if such individual stays in any other jurisdiction for more than 183 days in a calendar year.

 3. How may an individual apply for the special tax status under the GRR?

An individual may only apply to the Commissioner for Revenue (the “Commissioner”) for the special tax status through the services of an authorised registered mandatary. In this respect the GRR define an authorised registered mandatary as a person who:

(i) is in possession of a warrant to practise as an advocate or is in possession of a warrant to practise as legal procurator under the Code of Organization and Civil Procedure; or

(ii) has been appointed notary public in accordance with the provisions of the Notarial Profession and Notarial Archives Act; or

(iii) holds a warrant to practise the profession of accountant under the Accountancy Profession Act; or

(iv) is a member of the Malta Institute of Taxation, the Malta Institute of Management or the Institute of Financial Services Practitioners

and is registered with the Commissioner under the GRR.

A non-refundable application fee of €6,000 (or €5,500 if the qualifying property in respect of which the application is being submitted is situated in the south of Malta or in Gozo) must be paid for every application submitted.


The Residence Programme Rules 2014

1. The special tax status

The Residence Program Rules 2014 (“RPR”) replaced the High Net Worth Individuals– EU/EEA/Swiss Nationals Rules. The RPR are effective from 1st July 2013 and are broadly similar to the GRR. However whereas the GRR apply to qualifying individuals that are not EU, EEA or Swiss nationals, the RPR apply to individuals that are EU, EEA or Swiss nationals (and who are not Maltese nationals) that satisfy the conditions included therein.

Similar to the position under the GRR, the RPR provide that any individuals that satisfy the requirements included therein and qualify as beneficiaries under such rules acquire the special tax status. Beneficiaries are taxed at the rate of 15 percent on any income arising outside Malta and that is derived by the beneficiary, his spouse and minor children or children under his custody if such income is remitted to Malta.

Beneficiaries may also claim double tax relief on such income provided that such beneficiaries pay a minimum amount of tax equivalent to €15,000 after claiming double tax relief in respect of income arising outside Malta per year of assessment. The RPR provide that any other income of the beneficiary which is not chargeable to tax at the reduced rate of 15% is charged to tax at the rate of 35%.

2. Who may qualify as a Beneficiary under the RPR?

An individual may qualify as a Beneficiary under the RPR if such person:

(i) is not a permanent resident of Malta;

(ii) is an EU, EEA or Swiss national but is not a Maltese national;

(iii) is not a beneficiary under any of the following:

(iv) holds a qualifying property holding;

(v) is in receipt of stable and regular resources which are sufficient to maintain himself and his dependants without  recourse to the social assistance system in Malta;

(vi) is in possession of a valid travel document;

(vii) is in possession of sickness insurance in respect of all risks across the whole of the European Union normally covered for Maltese nationals for himself and his dependents;

(viii) can adequately communicate in one of the official languages of Malta; and

(ix) is a fit and proper person.

The RPR’s definition of a “qualifying property holding” and “dependant” are identical to the corresponding definitions under the GRR as described above. On the other hand the term “household staff” is defined as an individual who has been in an employment relationship, as evidenced by a contract of service, with the beneficiary for at least two years prior to the application by the beneficiary for special tax status. The Commissioner must be satisfied that the service is required to be provided in whole or in part within the qualifying property.

Similar to the position under the GRR, an individual shall (with effect from the date on which he acquired the special tax status) cease to possess the special tax status if at any time such individual ceases to satisfy any of the conditions listed above. An individual will also cease to possess the special tax status if such individual’s stay is not in the public interest or if such individual stays in any other jurisdiction for more than 183 days in a calendar year.

 3. How may an individual apply for the special tax status under the RPR?

An individual may only apply to the Commissioner for the special tax status under the RPR through the services of an authorised registered mandatary. In this respect the application process to be followed and the application fees to be paid are identical to those applicable under the GRR. Any individual currently benefiting from the High Net Worth – EU/EEA/Swiss Nationals Rules may request the Commissioner to grant him the special tax status under the RPR.


Highly Qualified Persons Rules

1. The main benefit offered by the Highly Qualified Persons Rules

The Highly Qualified Persons Rules (the “HQP Rules”) mainly target highly qualified persons who are employed in the financial services, gaming and aviation sectors. An individual satisfying the conditions under such rules and deriving income consisting in emoluments from a qualifying contract of employment may benefit from a reduced tax rate of 15 percent. Any income exceeding the amount of €5,000,000 derived from a qualifying contract of employment will not be subject to any further tax in Malta. The reduced rate of 15 percent applies under the HQP Rules without the possibility to claim any relief, deduction, reduction, credit or set-off of any kind.

The HQP Rules provide that income is considered to be derived from a qualifying contract of employment if such income consists of employment income derived from an “eligible office” amounting to a minimum of €75,000 per annum (adjusted annually with the Retail Price Index) exclusive of the annual value of any fringe benefits. In this regard the minimum amount as adjusted with the Retail Price Index for the basis year 2014 is equivalent to €81,205. The 15 percent tax rate is applied under these rules without the possibility to claim any relief, set-off, deduction, reduction, credit or set-off of any kind.

The term “eligible office” is defined under the HQP Rules as an employment or office with companies licensed and/or recognised by the Malta Financial Services Authority (“MFSA”) or the Lotteries and Gaming Authority or with undertakings holding an air operators’ certificate issued by the Authority for Transport in Malta, consisting in the following employments or offices:

(a) Chief Executive Officer, Chief Risk Officer (including Fraud and Investigations Officer), Chief Financial Officer, Chief Operations Officer (including Aviation Accountable Manager), Chief Technology Officer, Chief Commercial Officer,

(b) Portfolio Manager, Chief Investment Officer, Senior Trader/Trader, Senior Analyst (including Structuring Professional), Actuarial Professional, Chief Underwriting Officer, Chief Insurance Technical Officer, Odds Compiler Specialist, Head of Research and Development (including Search Engine Optimisation  and Systems Architecture), Aviation Continuing Airworthiness Manager, Aviation Flight Operations Manager, Aviation Training Manager, and Aviation Ground Operations Manager,

(c) Head of Marketing (including Head of Distribution Channels), Head of Investor Relations.

Any employments with undertakings holding an aerodrome licence issued by the Authority for Transport in Malta, consisting in employment as Chief Executive Officer also fall within the term “eligible office” in terms of the HQP Rules.

2. Who may qualify as a Beneficiary under the HQP Rules?

An individual may benefit under the HQP Rules if such person:

(i) derives employment income which is subject to tax being emoluments payable under a qualifying contract of employment and received in respect of work or duties carried out in Malta, or in respect of any period spent outside Malta in connection with such work or duties, or on leave during the carrying out of such work or duties;

(ii) is a person protected as an employee under Maltese law;

(iii) is in possession of professional qualifications;

(iv) has not benefited under rules under the Income Tax Act (Cap. 123 of the Laws of Malta) (the “ITA“) applicable for investment services expatriates and insurance expatriates;

(v) fully discloses for tax purposes and declares emoluments received in respect of income from a qualifying contract of employment and all income received from a person related to his employer paying out income from a qualifying contract as chargeable to tax in Malta;

(vi) proves that:

The benefit will apply for a consecutive period of five years from the year in which the individual is first liable to tax in Malta under the provisions of the ITA if the beneficiary is an EEA or Swiss national. On the other hand if the beneficiary is not an EEA or Swiss national the abovementioned time period is reduced to 4 years. The HQP Rules provide that any rights acquired under the HQP Rules shall be deemed to have been withdrawn with immediate effect if the grant of benefits under such rules and the beneficiary’s stay in Malta are not in the public interest. With regards to beneficiaries that are not EEA or Swiss nationals any rights acquired under the HQP Rules shall be deemed to have been withdrawn with retrospective effect if such beneficiary either:

(a) physically stays in Malta, in the aggregate, for more than 1,460 days; or

(b) directly or indirectly acquires real rights over immovable property situated in Malta or holds a beneficial interest directly or indirectly consisting of, inter alia, real rights over immovable property situated in Malta

 3. How may an individual apply for the benefit under the HQP Rules?

As opposed to the GRR, the RPR and the MRP Rules, there is no requirement to apply for the benefit under the HQP Rules through the services of an authorised registered mandatary. Another notable difference in the application process is that beneficiaries under the HQP Rules are not required to pay any application fee.

For an individual to benefit under the HQP Rules a declaration must be signed by the beneficiary and endorsed by the MFSA, Lotteries and Gaming Authority or the Authority for Transport in Malta, as applicable. Such declaration must be attached to such person’s income tax return.


Qualifying Employment in Innovation and Creativity (Personal Tax) Rules

1. The main benefit offered by the Qualifying Employment in Innovation and Creativity (Personal Tax) Rules

The Qualifying Employment in Innovation and Creativity (Personal Tax) Rules (the “QEIC Rules”) can be described as being broadly similar to the HQP Rules in terms of the benefits offered and the qualifying conditions. The QEIC Rules target eligible offices in the digital games and audio visual industry. Being similar to the HQP Rules the QEIC Rules enable an individual satisfying the conditions thereunder and deriving income consisting in emoluments from a qualifying contract of employment (as defined therein) to benefit from a reduced tax rate of 15 percent (without the possibility to claim any relief, deduction, reduction, credit or set-off of any kind).

A notable difference from the HQP Rules lies in the minimum amount of income derived from a qualifying contract of employment to be charged at the reduced rate of 15 percent. Whereas this is set at €75,000 (adjusted annually in line with the Retail Price Index) under the HQP Rules, the minimum amount under the QEIC Rules is set at €45,000 (also to be adjusted annually in line with the Retail Price Index). As in the case for the HQP Rules, any income exceeding the amount of €5,000,000 derived from a qualifying contract of employment under the QEIC Rules will not be subject to any further tax in Malta.

An ‘eligible office’ is defined by the QEIC Rules as an employment in a role directly engaged in the development of innovative and creative digital products as listed in the QEIC Rules and ascertained by the Malta Enterprise Corporation. In this respect the QEIC Rules list the following roles:

 2. Who may qualify as a Beneficiary under the QEIC Rules?

A person may qualify as a Beneficiary under the QEIC Rules if further conditions are satisfied. Such conditions are identical to the conditions to be satisfied under the HQP Rules. The notable exception is that the QEIC Rules do not require that an individual has not benefited under specific rules under the ITA applicable for investment services expatriates and insurance expatriates in order to qualify as a Beneficiary under such rules (contrary to the position under the HQP Rules).

Another distinction lies in the fact that the maximum period in which the benefits may be claimed under the QEIC Rules is reduced by one year in comparison to the HQP Rules when applicable to EEA and Swiss nationals and to individuals that are not EEA or Swiss nationals respectively.

3. How may an individual apply for the benefit under the QEIC Rules?

The application process for benefits under the QEIC is broadly in line with the process under the HQP Rules and accordingly a declaration must be signed by the applicant in order to benefit under the QEIC Rules. Such declaration must be endorsed by the Malta Enterprise Corporation and must be attached to the Beneficiary’s tax return.


Malta Retirement Programme Rules

1. The main benefit offered by the Malta Retirement Programme Rules

The Malta Retirement Programme Rules (the “MRP Rules”) target individuals that are nationals of the EU, the EEA (excluding Maltese nationals) or Swiss nationals by granting a special tax status whereby any foreign income derived by such individuals or their dependents and remitted to Malta is taxed at the reduced rate of 15 percent (flat rate).

Beneficiaries may also claim double taxation relief on any income being charged at such rate subject to the satisfaction of certain conditions – including inter alia the requirement that the beneficiary pays a minimum amount of tax in terms of the MRP Rules of €7,500 in respect of the beneficiary and €500 for every dependent and every special carer per year. In this respect the definition of the term “dependent” under the MRP Rules is broadly in line with the definition of the term ‘dependant’ under the GRR and RPR with the notable exception that the definition under the MRP Rules does not include any dependent brothers, sisters and direct relatives in the ascending line of the beneficiary or the spouse or person with whom the beneficiary has a stable and durable relationship. The definition of the term ‘household staff” is similar to the corresponding definition under the RPR.

 2. Who may qualify as a Beneficiary under the MRP Rules?

Further to the general conditions outlined in section 1 above, individuals must satisfy additional conditions in order to qualify as beneficiaries under the MRP Rules. Such conditions are identical to the conditions imposed under the GRR and RPR with certain minor exceptions. For instance a notable difference is that the MRP Rules do not require an individual to be in receipt of stable and regular resources which are sufficient to maintain himself and his dependants without recourse to the social assistance system in Malta. In lieu of such condition the MRP Rules impose another condition in order to qualify an individual as a beneficiary. In this respect the MRP Rules require an individual to be in receipt of a pension, as supported by documentary evidence, all of which is received in Malta and constitutes at least 75 percent of the beneficiary’s chargeable income.

The MRP Rules also require an individual to hold a qualifying property holding, with such conditions being broadly similar to the corresponding condition under the GRR and the RPR. However under the MRP Rules such property may be held jointly by two spouses or two individuals that prove to the satisfaction of the Commissioner that they are in a stable and durable relationship with one another. In this respect a “qualifying property holding” is defined by the MRP Rules as immovable property situated in the Maltese islands which:

(a) was acquired for a consideration of not less than €275,000 (or not less than €250,000 if the immovable property is situated on the island of Gozo, and not less than €220,000 if the property is situated in Gozo or the south of Malta and was purchased on or after 1 July 2013); or

(b) is leased for not less than €9,600 per annum (or not less than €8,750 per annum if the immovable property is situated on the island of Gozo or the South of Malta),

and, in either case, is occupied by the beneficiary as his primary residence provided that the persons who reside in the qualifying property are not persons other than the beneficiary, his dependants and household staff.

An individual will cease to possess the special tax status (with effect from the date on which such person acquired the special tax status) if at any time such person ceases to satisfy the prescribed conditions under the MRP Rules. Furthermore a beneficiary will also cease to possess the special tax status if such person acquires a permanent residence certificate or resides in Malta for less than 90 days averaged over any five year period.

3. How may an individual apply for the benefit under the MRP Rules?

An individual may apply to benefit under the MRP Rules by following the same application process under the GRR and RPR and accordingly the services of an authorised registered mandatary are required. The main distinction in this respect is that the application fee to be paid in order to benefit under the MRP Rules is set at €2,500.



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