Source: Kinga Warda¸ PKF Malta
Malta is well known as a tourist-friendly island¸ sun shines almost all year here. When we add up the fact of incredible limpid water and traditional Mediterranean food which you can buy on every corner… you might think that it’s a paradise (and you’re not wrong!). Besides the reasons as sun¸ sea and rich history of Malta¸ the thing which might be interesting for foreigners is a favourable tax regime.
Numerous Double taxation agreements (or in some cases unilateral provisions Between Malta and other European countries) are already in place. The same rules stand for Canada¸ the United States of America and Australia. It means that you never pay tax twice for the same income. Foreigners residing in Malta are taxed only on Maltese source income and on foreign income remitted to Malta.
There are no wealth or real estate taxes.
Whilst a tax on capital gains arising from the sale of immovable property does exist¸ this does not apply to the sale of one’s main residence if owned and occupied for at least 3 years.
Certain foreign income remitted to Malta qualifies for a reduced withholding rate of foreign tax (this applies mainly to dividends¸ interest and royalties)¸ or is exempt from foreign tax (this applies typically to private pensions and to certain capital gains).
To acquire the right to reside in Malta in terms of the Registration Certificate the applicant must be an EU¸ EEA (Iceland/Norway/ Liechtenstein) or Swiss national or may also apply for a tax status in terms of Malta Retirement Programme (MRP).
“Any EU citizen that proves he is not a threat to public health¸ public policy or public security has a right to live in Malta”
How to apply for Malta Retirement Programme (MRP)?
- The applicant must either own property or lease property in Malta or Gozo. Lease must be taken for not less than a 12 month period and evidenced by a certified lease agreement submitted together with the application.
With the new provisions set up recently the minimum requirements for Gozo are less than the ones for Malta.
- The minimum purchase price of property has been set at €275¸000 for Malta and €250¸000 for Gozo.
- The minimum rent is €9¸600 for Malta and €8¸750 for Gozo.
- All individuals resident in Malta and benefiting from the MRP must reside in Malta for not less than 90 days a year¸ averaged over any five year period. He may also not stay in any other jurisdiction for more than 183 days in a calendar year.
- Put simply¸ the entire pension/s must be declared in Malta and the pension/s shall constitute at least 75% of the total income chargeable to tax in Malta. Tax shall be a flat rate of 15% on the gross pension/s that shall be chargeable to tax in Malta.
- There is an application fee of €2¸500 making the administration of the Programme self-sufficient.