Malta has long been a popular destination for those seeking a sunny and relaxed lifestyle. In recent years, it has also become an attractive option for investing in a second residence. The Maltese government established The Residence Programme (TRP) in 2014.
The programme enables EU, EEA, or Swiss nationals who are not Maltese citizens to avail of special tax status, subject to fulfilment of the requirements.
An individual interested in applying for The Residence Programme must appoint an authorised mandatory for this purpose. The Integritas Group is an authorised registered mandatory and can assist you in the procedure to apply for The Residence Programme.
An individual participating in The Residence Programme would be subject to income tax at a rate of 15% on income arising outside of Malta and remitted to Malta. A minimum tax of €15,000 is due annually by 30 April of each year. Any other income arising in Malta and not subject to tax under the Rules would be charged at the standard rate of 35%.
The following dependants will also benefit from the tax treatment under the TRP:
- Beneficiary’s spouse
- Minor children, including children under the care and custody of the beneficiary or the beneficiary’s spouse
- Adopted children under the custody of the beneficiary or the beneficiary’s spouse
- Children who are not minors but because of illness or disability of serious gravity cannot maintain themselves
The Residence Programme Rules
To qualify for the special tax status under the programme, the applicant must:
1. Be an EU national (excluding Maltese nationals, a national of Iceland, Norway or Liechtenstein, or a national of Switzerland)
2. Not be a beneficiary of the following tax programmes:
- Residents Scheme Regulations
- High Net Worth Individuals Rules
- Malta Retirement Programme Rules
- Malta Global Residence Programme Rules
- Qualifying Employment in Innovation and Creativity Rules
- High Qualified Persons Rule
Applicants who are beneficiaries of the above programmes may renounce their benefits under such programmes before submitting their application for The Residence Programme.
3. Hold a qualifying property in Malta, which may refer to a purchase not less than €275,000 or a rental value of €9,600 per annum. If the property is in the south of Malta or Gozo, a consideration of €220,000 or a rental value of €8,750 per annum. The qualifying property cannot be let or sub-let; only the beneficiary and dependants may reside at any time.
4. Receive a stable and regular income or resources which is sufficient to maintain self and dependants without resorting to Malta’s social assistance system
5. Have a valid travel document.
6. Have health insurance covering risks in the European Union, which insurance should cover himself and his dependants.
7. Communicate adequately in Maltese or English.
8. Be a fit and proper person.
A non-refundable fee of €6,000 is paid to the Commissioner for Revenue for an application for the special tax status in terms of The Residence Programme. If the qualifying property is located in the South of Malta, the administrative fee required is €5,500. In that case, the qualifying property must be purchased at the application’s submission time.
The Application Process
- The Authorised Registered Mandatory (ARM) gathers the application and required documentation.
- The ARM then submits the application, documents, and administrative fee to the Commissioner for Revenue.
- The application and documents are checked and vetted.
- The ARM will receive an acknowledged letter stating the progress of the application. The ARM will be informed if additional information or documents are still to be submitted. Such documents must be submitted before the application will be processed.
- The application will go through a due diligence process.
- After the due diligence check, the ARM will be informed if the application is successful.
- A face-to-face meeting with the applicant and the ARM will be scheduled.
- A letter of intent will be sent to the ARM if the application may be continued to be processed, along with a notice of primary residence to be completed and signed by the applicant.
- The letter of intent is valid for twelve (12) months. Within such time, the certified lease agreement or final deed will be submitted so that a confirmation letter will be issued.