The Government of Malta has launched a residence programme (GRP) that is aimed at people who buy high value property and encourages foreign nationals to take up residence in Malta.
By means of Legal Notice 167 of 2013, the Global Residence Program Rules (GRP) 2013 have been published. Contrariwise as what has been expected, these Rules are only applicable to non-Maltese, non-EU, non-EEA and non-Swiss nationals. Further, by means of Legal Notice 178 of 2013, as of the 30th of June 2013, no other applications from Non-EU/ Non-EEA/ Non-Swiss nationals in terms of the HNWI scheme will be accepted.
The Global Residence Programme Rules may be summarised as follows:
|Malta||Gozo & South of Malta|
|Purchase of Immovable Property||Of at least €275,000||Of at least €220,000|
|Rental of Property||Of at least €9,600||Of at least €8,750|
|Minimum Tax Payable||€15,000||€15,000|
|Non-Refundable Application Fee||€6,000||€5,500 when the qualifying property is in the South of Malta.|
In terms of these Rules, the localities in the south of Malta are the following, Birżebbuġia, Cospicua, Fgura, Għaxaq, Gudja, Kalkara, Kirkop, Luqa, Marsascala, Marsaxlokk, Mqabba, Paola, Qrendi, Safi, Santa Luċija, Senglea, Siġġiewi, Tarxien, Vittoriosa, Xgħajra, Żabbar, Żejtun and Żurrieq.
The Global Residence Program Rules establish that on income arising outside of Malta but brought into Malta, the minimum tax payable is €15,000, with further income arising outside of Malta but brought into Malta to be taxed at a flat rate of 15%. The minimum tax payable, must be paid fully and yearly in advance and any other income will be taxed at the rate of 35%.
In order to avail from the Malta Global Residence Program Rules, the beneficiary must:
- Not be a Maltese/ EEA/ Swiss national;
- Not benefit from any other special tax status;
- Hold a qualifying property;
- Be in receipt of stable and regular resources which are sufficient to maintain himself and his dependants without recourse to the social assistance system in Malta;
- Be in possession of a valid travel document;
- Be in possession of sickness insurance in respect of all risks across the whole of the European Union normally covered for Maltese nationals, for himself and his dependents;
- Be fluent in either Maltese or English; and
- Be a fit and proper person.
In terms of the GRP Rules the special tax status may now be inherited. Moreover, the Rules state that the beneficiary must continuously satisfy the obligations in terms of the Rules.
An Overview of The Residence Programme Rules (TRP)
The High Net Worth Individuals Rules have now been amended to reflect the thresholds of the Global Residence Programme and are now entitled the Residence Programme Rules (TPR). Applicants taking up residence in Malta may benefit from a special and favourable Malta Tax status and treatment and Tax Incentives.
Residence in Malta
In late June 2014 (earlier this year), the Maltese government also launched the Global Residence Programme (GRP) to replace the HNWI programme (for Non-EU/non-EEA/non-Swiss nationals) which was launched in 2012. The GRP programme lowered the minimum thresholds for the purchase of immovable property and rental property by foreigners in Malta. The minimum tax threshold for tax exiles who purchase property in Malta was lowered to €15,000 from the previous €25,000. The bond amount of €500,000 was removed completely while the application fee for foreigners purchasing property in the South of Malta and Gozo was slightly reduced.
Authorised Registered Mandatory
Applications for the GRP Rules may be applied for only through an Authorised Registered Mandatory. We may apply on your behalf due to the fact that CSB is a registered Mandatory.
The Rules state that a person availing of the HNWI scheme may request to change to the Global Residence Programme Rules and start availing of the more recent and more advantageous program. Those applicants who (as of the 30th of June) are still in the process of applying for their HNWI status may also choose to avail of the new GRP program. This request may be done to the department through an Authorised Registered Mandatory.
What is the Global Residence Programme?
This Programme grants applicants a special tax status, and is applicable to non-EU, non-EEA and non-Swiss nationals. The GRP enacted in 2013 has replaced the Residents Scheme Regulations, (PRP) and the High Net Worth Individuals Rules.
Through the GRP, non- EU/EEA/Swiss nationals taking up residency in Malta may benefit from a special and favourable tax status and treatment as follows:
- Income arising outside of Malta which is received in Malta would be chargeable to tax in Malta at the flat rate of 15%;
- Income arising in Malta and capital gains realised in Malta would be taxable in Malta at the higher rate of 35%;
- No Malta tax would be chargeable on income arising outside Malta which is not received in Malta; and
- No Malta tax would be chargeable on capital gains realised outside Malta even if these are received in Malta.
What are the qualifications and documentation needed in order to qualify for the GRP?
- The applicant must hold a Qualifying Property and intends to take up residence in Malta;
- The applicant is not a person who benefits under the Residents Scheme Regulations, High Net Worth Individuals – Non-EU / EEA / Swiss Nationals Rules, the Malta Retirement Programme Rules, the Qualifying Employment in Innovation, Creativity (Personal Tax) Rules or the Highly Qualified Persons Rules;
- The applicant is neither a Maltese national nor an EU/EEA/Swiss national;
- The applicant is in receipt of stable and regular resources which are sufficient to maintain himself and his dependants without recourse to the social assistance system in Malta;
- The applicant is in possession of a valid travel document;
- The applicant is in possession of sickness insurance in respect of all risks across the whole of the European Union normally covered for Maltese nationals for himself and his dependents;
- The applicant does not intend to stay in any other jurisdiction for more than one hundred and eighty-three days in a calendar year;
- The applicant is not domiciled in Malta and that he does not, within 5 years from the date of application, intend to establish his domicile in Malta;
- The applicant is able to adequately communicate in one of the official languages of Malta; and
- The applicant is a fit and proper person.
What constitutes a Qualifying Property?
- Immovable property situated in Malta other than in the south of Malta : €275,000
- Immovable property situated in the south of Malta/ Gozo : € 220,000
- Immovable property situated in Malta other than in the south of Malta: €9,600 per annum
- Immovable property situated in the south of Malta/ Gozo: € 8,750 per annum
The lease needs to be taken out for not less than a twelve month period and is evidenced by a certified lease agreement.
Who can be deemed to be a dependant in the GRP?
- The applicant’s spouse or person with whom the applicant is in a stable and durable relationship;
- Minor children including adopted minor children and children who are in the care and custody of the applicant and the spouse/ partner;
- Children who are under the age of twenty-five, including adopted children and children who are in the care and custody of the applicant and the spouse/ partner, provided that such children are not economically active;
- Children including adopted children and children who are in the care and custody of the applicant and the spouse/ partner, who are not minors but who because of circumstances of illness or disability of a serious gravity, are unable to maintain themselves;
- Dependent brothers, sisters and direct relatives in the ascending line of the applicant and the spouse/ partner.
How can I apply for the GRP?
An application with respect to the GRP must be submitted to International Taxation Unit through an Authorised Registered Mandatory. CSB Group is registered as an Authorised Registered Mandatory.