Malta Retirement Programme Rules, 2012
Issued in October 2012, the Malta Retirement Programme Rules (MRP) (Legal Notice 317/2012 as amended by Legal Notice 269 of 2014) provides for a special tax status for retirees from the EU, EEA countries and Switzerland who remit their pension to Malta.
Individuals benefiting from this programme are prohibited from being employed or working in Malta however they may hold a non-executive post on the board of a company resident in Malta. Such individuals may also partake in activities related to any institution, trust or foundation of a public character and any other similar organisation or body of persons, which are also of a public character, that is engaged in philanthropic, educational or research and development work in Malta.
Applicants also have the option to include on their application their household staff, whereby a household staff means 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 provided that the Commissioner is satisfied that the service is required to be provided in whole or in part within the qualifying property.
An attractive tax rate of 15% is payable on the portion of pension remitted provided that the minimum tax payable is that of €7,500 for the beneficiary and € 500 for every dependant. This rate of tax will apply from the date of confirmation of the special tax status which is referred to as the “appointed day” up to “day of cessation of status”. Progressive tax rates are to apply in the days prior to the appointed day or subsequent to the day of cessation of status.
Applicants meeting all of the following criteria are eligible to submit an application in terms of the Malta Retirement Programme:
– Owns OR rents an immovable property in Malta which the individual occupies as his principal place of residence worldwide. The established minimum values for purchases are of €275,000 for property situated in the north of Malta, or €220,000 for property situated in the south of Malta or in Gozo, whilst for rentals the minimum values are set at €9,600 per annum for property situated in the north of Malta, or €8,750 for property situated in the south of Malta or Gozo. The property needs to have been bought after 1st January 2011. The Rules further provided that if a property was purchased before 1st January 2011 for an amount which is less than the above-mentioned amounts, such property may also satisfy this requirement if the applicant declares that the property was bought for less than the amounts indicated above and the said declaration is supported by the following documentation:
o A separate and independent architect valuation of the property; and
o Architect’s plan of the property.
– Is not a beneficiary in terms of the following Special tax statuses:
o Residents Scheme Regulations;
o High Net Worth Individuals Rules; or
o Highly Qualified Persons Rules.
However an individual may renounce to the benefits provided under any of the above-mentioned Rules prior to submitting an application in terms of Malta Retirement Programme.
– The pension which is received in Malta, must constitute at least 75% of the beneficiary’s chargeable income. Conversely, the beneficiary may only generate up to 25% of his/her total chargeable income from any non-executive posts. Therefore for any particular tax year, an individual’s chargeable income needs to be made up of at least 75% pension and 25% of ‘other’ income. All the chargeable income may be constituted of pension income.
– Is in possession of a valid travel document, certified proof of which is submitted together with the application.
– Is in possession of sickness insurance which covers himself and his dependents in respect of all risks across the whole of the EU normally covered for Maltese nationals. In the eventuality that the applicant is not in a position to transpose EU health rights or rights under a Reciprocal Agreement that Malta is a signatory to, the health insurance cover must be procured by a company licensed in Malta or by an international reputable health insurance company and a certified copy of the insurance policy needs to be submitted together with the application documentation.
– Is not domiciled in Malta and does not intend to establish his domicile in Malta within five years from the date of application.
– Is a fit and proper person. The individual is required to submit an updated police conduct certificate) accompanied by a sworn declaration before a Commissioner for Oaths in Malta confirming whether the individual was not found guilty of any civil or criminal convictions as well as providing a confirmation of any civil or criminal on-going proceedings. If the individual was found guilty, details of such convictions need to be provided in a separate declaration signed in original by the respective individual. The Commissioner reserves the right to make further questions for the purposes of this requirement.
An application for special tax status under the MRP must be completed and submitted against a disbursement fee of €2,500 and may only be submitted to the Commissioner for Revenue through the services of an Authorised Registered Mandatory (ARM) such as Advocates Primei.
How can we help?
As registered authorised mandatories, this office can assist applicants throughout all stages of the application process.