The Maltese government recently launched the Global Residence Programme which is intended to incentivise persons who are not nationals of EEA countries or Switzerland to obtain a special tax status which would entitle them to beneficial tax treatment on any foreign income remitted by them to Malta.
Persons who qualify for such status will be entitled to pay tax in Malta at the reduced flat rate of 15% on all foreign income remitted to Malta as subject to a minimum tax liability of EUR 15,000 per annum which must be paid by not later than 30 April of each basis year. The minimum tax covers income of the holder of the special tax status as well as the person’s spouse, minor children in their care and custody, and other children who are unable to maintain themselves.
Any other income (apart from foreign income remitted to Malta) is subject to tax at 35%, including any bank interest in Malta and income from employment in Malta.
Provisional Tax payments on account of the total tax liability for each year are to be paid three times a year, but no provisional tax is payable during the first year.
There are no capital, wealth, or inheritance taxes in Malta, and no capital gains tax is payable on any capital gains arising outside Malta even if remitted to Malta.
Apart from the afore-said minimum tax liability, there are no annual fees payable to the Maltese governmental authorities.
In order to qualify for the special tax status, a number of conditions must be fulfilled by the applicant by reference to:
- the value and use of real estate which is owned or leased by the person in Malta;
- the amount of time spent in other jurisdictions;
- the person’s financial resources and ability to reside in Malta without any recourse to the Maltese social security system;
- the person’s residency status; and
- a fit and proper test.
A return evidencing compliance with all GRP conditions must be filed annually.
Once the minimum tax is paid for the first year, the Inland Revenue will also issue a separate letter for presentation – together with the special tax status letter – to the Maltese authorities responsible for issuance of residence permits. These two letters from the Inland Revenue would form the basis for the issuance of a uniform residence permit to the person in possession of the special tax status.
For more information on the requirements for special tax status and the application process, please contact Dr Stephen Attard at GANADO Advocates.