Global Residence programme For Non-EU, non-EEA, Non-Swiss Nationals
What you should know
The Global Residence Programme (GRP)is a programme designed to attract non-EU, non-EEA (Iceland, Norway or Leichtenstein) and non-Swiss nationals who are not long-term residents. Individuals benefitting under the GRP may be employed in Malta subject to the satisfaction of the requisite conditions for obtaining a work permit. Beneficiaries may also have special carers providing a service in their qualifying property, subject to the satisfaction of certain prescribed procedures.
An individual who is a beneficiary under the following tax programmes may not apply for the GRP:
- Residents Scheme Regulations;
- High Net Worth Individuals Rules;
- Malta Retirement Programme Rules;
- Qualifying Employment in Innovation and Creativity Rules; or
- Highly Qualified Persons Rules.
An individual seeking to submit an application under the GRP Rules must satisfy the below-mentioned conditions:
- The applicant owns or rents qualifying owner property or qualifying rented property which the individual occupies as his place of principal residence worldwide and which was either (i) purchased in Malta (other than the South of Malta) for a value of not less than Eur275,000 or in Gozo or the South of Malta for not less than Eur220,000; or (ii) rented for not less than Eur9,600 per annum for a property situated in Malta (other than the South of Malta) or Eur8,750 for a property situated in Gozo or the South of Malta. A certified lease agreement would need to be submitted to the Commissioner of Inland Revenue as evidence of the lease which must be taken out for at least a 12-month period. It is noteworthy that (i) no person other than the beneficiary and his/her dependants may reside in the qualifying property at any time and (ii) the qualifying property may not be let or sub-let.The following localities deemed to be in the South of Malta for the purposes of the GRP:
- Santa Lucija;
- The applicant is in receipt of stable and regular resources that are sufficient to maintain himself/herself and his/her dependants without recourse to the social system in Malta.
- Is in possession of a valid travel document.
- Is in possession of sickness insurance procured by a company licensed in Malta or by an international reputable health insurance company, which covers himself and his dependants in respect of all risks across the whole of the EU normally covered for Maltese nationals.
- The applicant needs to be fluent in Maltese or English.
Special Tax Status
An individual who has been granted special tax status (hereinafter referred to as the “beneficiary”) in terms of the GRP would benefit from the following tax treatment in Malta:
- Income from foreign sources would be subject to income tax in Malta if remitted to Malta at a flat rate of 15% with the possibility of claiming double taxation relief but subject to the minimum annual tax liability of Eur15,000 inclusive of the number of dependants of the beneficiary. This amount is payable to the Commissioner of Inland Revenue by not later than the 30th April of the year in which the income is remitted to Malta together with a return confirming that the conditions of the GRP have been complied with. This rate of tax will apply from the year of confirmation of the special tax status up to the year of cessation of status, both years included.
- Any other income not chargeable at the rate of 15% (including capital gains arising in Malta on the transfer of a capital asset would be chargeable at the rate of 35%.
- Capital gains on the transfer of immovable property in Malta would be subject to a final withholding tax of 12% of the transfer value. In this regard an exemption would apply in certain circumstances such as the sale of immovable property which has been occupied as the beneficiary’s sole ordinary residence for a period of three years.
- Any realised capital gain arising outside Malta and remitted to Malta would be exempt from Malta tax.
Dependants who will be able to benefit from the rate of 15% are the following:
- The beneficiary’s spouse;
- Minor children, including minor children and children who are in the care and custody of the beneficiary or the beneficiary’s spouse;
- Children including adopted children and children who are in the care and custody of the beneficiary of the beneficiary’s spouse, who are not minors but who because of circumstances of illness or disability of a serious gravity, are unable to maintain themselves.
Procedure for application
An application for special tax status under the GRP may only be submitted to the Commissioner of Inland Revenue through an Authorised Registered Mandatory (“ARM”).
A non-refundable administrative fee of Eur6,000 is due by means of a bank draft payable to the Director General (Inland Revenue). If the qualifying owned property is situated in the South of Malta, the administrative penalty is of Eur5,500 and in this case such property needs to have been purchased at the time of submission of the application.
Grandfathering of HNWI Rules
In the case of individuals who have applied for a special tax status in terms of the High Net Worth Individuals – No-EU/EEA/Swiss Nationals Rules but were not yet confirmed as such and who request the Commissioner to have their special tax status to be regulated by the GRP will not need to submit another application. Such individual may however request the Commissioner through the ARM to consider the application in terms of the HNWI Rules as having been made in terms of the GRP.
Working in Malta
Where the beneficiary would like to work in Malta or where the special carer is a third-country national and therefore requires a work permit, the requisite procedures need to be followed in order for a work permit to be issued by the Employment and Training Corporation.