The Malta Retirement Programme

The Malta Retirement Programme Rules, enacted by the Maltese Government in 2012, allows beneficiaries and their qualifying dependents to qualify for a flat rate of tax of 15%, subject to fulfilling certain criteria.

One of the main requirements is that the beneficiary, who may be EU/EEA, a Swiss national, or a third country national, is not in employment and is in receipt of a pension, all of which is received in Malta and constitutes at least 75% of the beneficiary’s chargeable income.

Other key requirements for an individual to qualify as a beneficiary are:

• Holds a qualifying property, either:
  • By way of purchase at a minimum value of €220,000 if situated in Gozo or South of Malta or €275,000 for properties situated in the rest of Malta; or
  • By way of lease at a minimum rent of €8,750 per annum if situated in Gozo or the South of Malta or €9,600 per annum for properties situated in the rest of Malta.

Where two individuals are spouses or in a stable and durable relationship, both individuals may jointly hold the same qualifying property holding. The qualifying property cannot be let or sublet, and no person may reside in the property other than the beneficiary, their qualifying dependents, and qualifying household staff.

• Is not a beneficiary in terms of any other special tax status;
• Does not spend more than 183 days in any other single jurisdiction;
• Is not a Maltese national; 
• Is not domiciled in Malta and does not intend to establish his/her domicile in Malta within 5 years from benefitting from the special tax status;
• Holds a comprehensive health insurance covering themselves and all dependents for all risks across the whole of the EU;
• Holds a valid travel document;
• Is of good character.

In terms of Malta’s remittance basis of taxation, persons resident but not domiciled in Malta are taxable on any income and certain capital gains arising in Malta, and on income arising outside of Malta to the extent that it is received in Malta. Any capital gains arising outside of Malta are not subject to tax in Malta, whether received in Malta or not.

The special tax status grants the beneficiaries and their qualifying dependents a flat rate of tax of 15% on any income considered to be arising outside of Malta that is received in/remitted to Malta, subject to a minimum annual tax of €7,500, plus an additional €500 in respect of every dependent and special carer (payable in full in both the year when the tax status is received and the year when it ceases to apply, as well as each full tax year for which the status applies). Any chargeable income and capital gains arising in Malta would generally be taxable at a flat tax rate of 35%.

• Where the beneficiary applies for or becomes a permanent resident or long-term resident of Malta, they are no longer eligible to benefit from the special tax status and become taxable on all income and gains on a worldwide basis, whether such income and gains arise in Malta or are remitted to Malta, as set out in the Income Tax Act.
• The beneficiary must spend a minimum of 90 days per calendar year in Malta, averaged over any five-year period.
• An application for a special tax status may only be submitted to the Maltese tax authorities through an Authorised Registered Mandatory (“ARM”) such as KPMG Malta.

A Tax Residence Certificate (‘TRC’) may be issued by the Maltese tax authorities, subject to the beneficiary satisfying to the Commissioner for Tax and Customs that they are a tax resident of Malta in terms of Maltese domestic law.

Our experts can provide professional assistance with a variety of tax and immigration matters.