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Malta Residency

A non-domiciled Maltese tax resident person is not subject to tax on world-wide income however they would still be expected to pay tax on any Malta sourced income as well as foreign sourced income which is received or remitted to Malta. This would then be subject to progressive rates of tax which after tax deductibles of just under €12,000 reach 32% for amounts below €30,000 and peak at 35% once taxable income reaches €60,000. There are two available routes to residency as follows:

Retirement Plan Scheme

Introduced in 2012 and aimed at retirees who are not in employment and therefore in receipt of earned income. The basic conditions that need to be satisfied to qualify for the retirement plan scheme are as follows:

  • The applicant must own a qualifying property in Malta with a minimum acquisition price of €275,000 (€250,000 if in Gozo) or a rental of property of not less than €9,600 per annum (€8,750 if in Gozo.)
  • The applicant must declare that the property is being occupied as the principal place of residence worldwide.
  • The applicant must show that he is in receipt of a regular pension and is not employed.
  • The applicant must hold private medical insurance which covers risks across the EU.
  • The applicant must declare that he does not stay in any other jurisdiction for more than 183 days in any calendar year.
  • The applicant must reside in Malta for at least 90 days per annum averaged over a five year period.
  • The applicant must be a fit and proper person (have a clean police record.)
  • The applicant has no intention of establishing his domicile in Malta.

High Net Worth Individual (HNWI) Scheme

This is a special tax status in Malta which allows persons from the European Union, European Economic Area and Switzerland to establish residency subject to certain qualifying conditions. Tax residency is valid for an indefinite period provided that all the relevant conditions are fulfilled on a continuing basis. The basic conditions that need to be satisfied to qualify for the high net worth individual scheme are as follows:

  • The applicant must own a qualifying property in Malta with a minimum acquisition price of €400,000 or a rental of property of not less than €20,000 per annum.
  • The applicant and his family must have their habitual residence in such property as the principal place of residence worldwide.
  • The applicant must not benefit from any other Maltese special tax status such as highly qualified persons or retirement scheme plan etc.
  • The applicant must be in receipt of regular and stable sources of income to maintain themselves and their families as they would have no recourse whatsoever to seek Maltese social benefits.
  • The applicant must be in possession of a valid travel document.
  • The applicant must hold private medical insurance for themselves and their dependants which covers all risks across the EU. Health insurance must be sourced from either a Maltese registered company or an international health company of repute.
  • The applicant cannot be a long term resident of Malta.
  • The applicant must be a fit and proper person (have a clean police record.)

The earned income of such an individual which is remitted to Malta is taxed at 15%. HNWI’s have a right to claim double taxation relief where the minimum amount of tax payable exceeds €20,000 per annum however they are also liable to a flat tax of €2,500 per annum for each dependant. Any other chargeable sources of income are subject to tax at a rate of 35%.

To speak directly to a certified financial planner for detailed financial planning and tax planning advice Tel: +350 200 50982 or email enquiries@fiduciarywealth.eu.