CSB Group One of First Registered Mandatories

CSB Group has recently become one of Malta’s first officially - recognised mandatories by the IRD (Inland Revenue Department). CSB Group can now assist individuals who wish to apply for a special tax status under the HNWI Rules, collectively referred to as the High Net Worth Individuals Rules.

The said Rules will run in parallel to the amended Residents Scheme Regulations but will not regulate holders of a valid permanent residence certificate issued by the Commissioner of Inland Revenue in terms of the Residence Scheme Regulations.

Authorised Mandatories

Authorised Mandatories at CSB Group – namely CSB Group CEO Michael J.Zammit, as well as CSB Group Head of Legal and Director and Managing Partner of CSB Advocates, Dr Andrew J. Zammit, are now able to represent their clients for the purposes of the High Net Worth Individuals Rules.

Being members of the Institute of Financial Services Practitioners (IFSP) and The Malta Institute of Management (MIM) is required when applying for mandatory status, besides holding a warrant to practice as advocates under the Code of Organisation and Civil Procedure, as well as a warrant to practice as legal procurators under the Code of Organisation and Civil Procedure.

In order for an Authorised Mandatory to be able to represent his clients such person needs also needs to be registered with the Commissioner of Inland Revenue.

To whom do these High Net Worth Individuals Rules apply?

Individuals who may benefit from these Rules are:

• EU nationals (excluding nationals of Malta);
• Nationals of Iceland, Norway and Liechtenstein;
• Nationals of Switzerland;
• Any individual who is not a citizen of the EU.

On the basis of information released so far it is understood that the new scheme is similar in scope to the Permanent Resident Scheme it replaces such that individuals eligible to benefit under the new scheme would be taxable in Malta on foreign source income which is received in Malta at the favourable flat rate of 15% (such persons are not chargeable to tax in Malta on foreign source capital gains). Local source income and gains would be taxable in Malta at the higher rate of 35%. Still, eligibility criteria and ongoing requirements have been enhanced and heightened, particularly in respect of non-EU/EEA/Swiss nationals.

Immovable property in Malta

As such, eligible individuals shall be required to acquire qualifying immovable property in Malta having a value of not less than €400,000 or to otherwise procure such qualifying immovable property under a lease agreement against aggregate rental consideration of not less than €20,000 per annum.