Tax Optimisation and Residence Programme in Malta

  Tax Optimisation Services for Individuals and Businesses
Tax Optimisation and Residence Programme in Malta

Malta has a very attractive tax system that benefits corporations, small businesses and individuals alike.

Enjoy an attractive quality of living in Malta

Surrounded by crystal clear blue water of the Mediterranean, Malta is located on the southern tip of Europe just below Sicily, Italy. The country benefits from hot dry summers and mild winter temperatures with over 300 days a year of sunshine. Malta offers a healthy and safe lifestyle with low crime rates, excellent health and education systems and a relatively low cost of living.

The island has an active and healthy outdoor lifestyle meaning ample opportunities for year -round water sports, swimming, golfing, hiking, fishing, horse riding and much more. There is an abundance of cafés, restaurants, clubs, cinemas, theatres, sports clubs or gyms which are almost always within a walking distance of office complexes or residential areas.

Malta’s strategic location in the Mediterranean makes it an excellent location for people who require easy access to mainland Europe with all major European cities a few hours flight away. Malta, as an EU member state offers Schengen travel and has visa waiver agreements with over 180 countries including Visa free travel to the USA for Maltese citizens.

Malta has a very attractive tax system that lures corporations, small businesses and individuals alike.

There are a variety of residence programmes available for EU/EEA and non-EU/EEA citizens including tax benefits such as low personal tax rates, no inheritance or death taxes and no wealth taxes. English is the country’s official language (Maltese being the other), although many other languages are spoken with fluency on the island meaning communication is easy.

The Malta Global Residence Programme

The Malta Global Residence Programme is available to non-EU, non-EEA and non-Swiss nationals and includes the spouse of the main applicants, children, dependent relatives and financial dependents. It also allows for travel within the Schengen area permitted without the need of applying for a Schengen visa.

The applicant must be “Fit and Proper” and be able to adequately communicate in English or Maltese. There is no minimum stay requirements for physical presence in Malta but for tax purposes, the resident must sign a declaration that he or she has not spent more than 183 days in any other country.

Under the Global Residence Programme Rules law, non-domiciled residents of Malta enjoy special tax status, a flat rate of 15% on foreign source income. However, the main applicant must pay a minimum annual tax of 15,000 Euros per year. All other foreign sourced income which is not remitted to Malta will not be taxed in Malta. Within 12 months of taking up residence under the Malta Global Residence Programme, the residence permit holder needs to comply with the requirement of acquiring or renting property in Malta.

The Maltese Citizenship by Investment

The Malta Citizenship by Investment Programme is available to non-EU, non-EEA and non-Swiss nationals and includes the spouse of the main applicant(s), children, dependent relatives and financial dependents. The programme provides the possibility to acquire Maltese citizenship and a Maltese passport by naturalisation, citizenship for life that can be passed onto future generations.

The Maltese passport is one of the strongest in the world. It offers visa-free or visa-on-arrival travel to 182 destinations including Canada, the US and the EU. It offers the right to live, work, and study in any of the 28 EU countries and Switzerland.

In very simple terms, you must acquire a place of residence in Malta. After receiving an address in Malta, you must file, in person, an application for a residence permit in Malta and subsequently apply for naturalisation as a citizen of Malta. The certificate(s) of naturalisation will, if all relevant requirements have been satisfied, be issued 12 months after the date on the residence permit. Maltese passport(s) can subsequently be issued. Applicants must also satisfy a 12 month residence requirement in Malta prior to naturalisation.

The Malta Residence Programme 2014

The Residence Programme Rules allows EU/EEA/Swiss nationals taking up residency in Malta to benefit from attractive tax incentives. All successful applicants of the Residence Programme 2014 will be eligible for a special tax status and be eligible for a flat rate of 15%. However, the minimum tax payable (after deduction of double taxation relief) in respect of any year shall be €15,000.

As with the Malta Global Residence Programme, there are similar property and residence requirements where the individual cannot be resident in another country for more than 183 days. Additionally, for the Residence Programme 2014, the applicant must be in receipt of stable and regular resources which must be to a level that they can maintain the applicant and his/her dependents with the need of using the social assistance system in Malta.

Highly Qualified Individuals

The Highly Qualified Individuals scheme is designed to attract knowledgeable and experienced personnel in the financial services sector, gaming sector and aviation-holding eligible offices. The individual income from a qualifying contract of employment in an “eligible office” is subject to tax at a flat rate of 15%, provided that the income amounts to €84,991 for 2019 (excluding the annual value of any fringe benefits) adjusted annually in line with the Retail Price Index. The 15% flat rate is imposed up to a maximum income of €5,000,000, the excess is exempt from tax.

The 15% tax rate applies for a consecutive period of 5 years for EEA (i.e. EU countries plus Norway, Iceland and Liechtenstein) and Swiss nationals and for a consecutive period of 4 years for third country nationals. However, EEA and Swiss nationals who have availed themselves of the benefit under this scheme may apply for a one-time extension of 5 years to the qualifying period.

There are several requirements that must be met for this programme including professional qualifications, experience, insurance and residence.

An application for a formal determination relating to eligibility under the Highly Qualified Persons Rules must be made to the Malta Financial Services Authority in the case of financial services, to the Lotteries and Gaming Authority and the Authority for Transport in Malta using this form in case of Aviation Services.

The benefit is exercised for each year of assessment by means of a declaration signed by the beneficiary and endorsed by the competent authority as the case may be. This form is to be attached to the income tax return and filed with the Inland Revenue Department by the tax return date.

Interested in any of the above?

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