The United Nations Pensions Programme

The United Nations Pension Programme Rules, enacted by the Maltese Government in 2015, provides beneficiaries and their qualifying dependents an exemption from income tax in Malta on the UN Pension income or widow’s/widower’s benefit which is received in Malta.

One of the main requirements is that the beneficiary, who may be either EU/EEA and Swiss national or a third country national, is not in an employment relationship and is in receipt of a UN pension or a widow’s/widower’s benefit, of which at least 40% is received in Malta.

Other key requirements include:

• 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.

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; 
• Possesses adequate economic resources to maintain themselves and their dependents;
• Holds a comprehensive health insurance covering themselves and all dependents for all risks across the whole of the EU;
• Holds a valid travel document;
• Can effectively communicate in one of Malta’s official languages (Maltese or English);
• 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 an exemption from income tax in Malta on the UN Pension income or widow’s/widower’s benefit which is received in Malta.

Further, the beneficiaries and their qualifying dependents benefit from a flat 15% tax on any other income considered to be arising outside of Malta that is received in/remitted to Malta, subject to a minimum annual tax of €10,000 for other income arising outside of Malta, plus an additional €5,000 in the event that both spouses are in receipt of a UN pension.

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 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.
• 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.

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