Malta Retirement Programme Rules
Beneficial Tax Rate
15% beneficial tax rate on pension received by EU/EAA Swiss national who is not employed and who meets a number of conditions. The 15% beneficial tax rate applies also to foreign income received in Malta by the individual or his dependents.
The beneficial 15% rate of tax does not apply to local source income and capital gains. The latter will be taxed at a straight 35%.
In view of the beneficial tax rate mentioned above, a minimum tax (after claiming double tax relief, if available) of Euro 7,500 and an additional Euro 500 per dependent should be paid every year.
Tax paid under these rules (excluding tax paid on Malta sourced income and capital gains) will not be refunded.
Certain conditions should be satisfied for an individual to benefit from this scheme:
(a) The individual must prove to the satisfaction of the Commissioner of Inland Revenue that he owns a qualifying property (either owns a property situated in Malta of a value of not less than Euro 275,000, or rents property in Malta of not less than Euro 9,600 per annum, or holds a qualifying property holding situated in Gozo of a value of not less than Euro 250,000, or rents property in Gozo of not less than Euro 8,750 per annum);
(b) The individual is neither a Maltese national nor a third-country national;
(c) The individual is in receipt of a pension (supported by documentary evidence), all of which is received in Malta and constitutes at least 75% of the beneficiary’s chargeable income;
(d) The individual is in possession of sickness insurance in respect of all risk across the whole of the European Union normally covered for Maltese nationals for himself and his dependents;
(e) The individual is not domiciled in Malta and he/she meets a fit and proper test.
(f ) The individual does not benefit under the Residents Scheme Regulations, the High Net Worth Individuals— EU/EEA/Swiss Nationals Rules, the High Net Worth Individuals—Non-EU/ EEA/ Swiss Nationals Rules, the High Net Worth Individuals—Non-EU/ EEA/ Swiss Nationals Rules or the Highly Qualified Persons Rules;
(g) The individual is in possession of a valid travel document;
Cessation of Status
The law prescribes a number of circumstances that would result in loss of status, which include the following:
(a)If a non-qualifying property is not held;
(b) If the individual becomes a Maltese national or a third country national;
(c) If the individual fails to receive in Malta the entire pension indicated in the documentary evidence submitted to the Commissioner;
(d) If the individual is not in possession of sickness insurance in respect of all risks normally covered for Maltese nationals for himself and his dependents;
(e) If the individual establishes his domicile in Malta;
(f) If the individual acquires a permanent residence certificate in terms of article 7 of the Free Movement of European Union Nationals and their Family Members Order;
(g) If the individual’s stay is not in the public interest;
(h) If the individual resides in Malta for less than ninety days a year averaged over any five year period; or
(i) If the individual stays in any other jurisdiction for more than one hundred and eighty-three days in a calendar year.
Beneficiaries will be subject to reporting obligations including the preparation of a tax return and the adequate form to be attached to the income tax return.
The individual should appoint an authorised registered mandatory to act on his behalf in respect of all applications, correspondence, submissions, filings, declarations and notifications that should be prepared and submitted. All documentation should be submitted by the appointed authorised registered mandatory. The authorised registered mandatory should be register as such with the Inland Revenue Department, as specified by the Department.