Individuals from the EU, the EEA (Iceland, Norway and Liechtenstein), Switzerland and outside the EU are eligible to apply for a special tax status in terms of the High Net Worth Individuals Rules.
In order to be granted a special tax status an applicant must satisfy the following conditions:
- Hold a “Qualifying Property Holding” defined as immovable property in Malta that was either (i) purchased after 1st January 2011 for a consideration of not less than Eur400,000 or (ii) rented for not less than Eur20,000 per annum;
- The Qualifying Property Holding must be used by the applicant and his/her dependants as their principal place of residence and may not be let or sub-let;
- May not benefit under any other Scheme such as the “Residents Scheme Regulations” or the “Highly Qualified Persons Rules”;
- Receives stable and regular income that is sufficient to maintain himself/herself and his/her dependants with needing recourse to the Maltese social assistance;
- Possess a valid travel document;
- Possess health insurance for himself/herself and his dependants covering all risks in the EU;
- Not domiciled in Malta;
- Must be a fit and proper person.
Special Tax Status
Foreign Income remitted to Malta would be chargeable at a flat rate of 15% subject to an annual minimum payment of Eur20,000
Foreign Income remitted to Malta would be chargeable at a flat rate of 15% subject to an annual minimum payment of Eur20,000 and a further Eur2,500 in respect of each dependant;
- Any other income not chargeable at the rate of 15% (including capital gains arising in Malta on the transfer of a capital asset, other than immovable property situated in Malta) 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 individual’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.
Procedure and Administrative Fee
An application for a special tax status certificate and supporting documents must be submitted to the Inland Revenue Commissioner through an Authorised Registered Intermediary. If at the time of application, the applicant does not hold “Qualifying Property Holding” the Commissioner will issue a letter of intent and issue a special tax status certificate only upon receipt of evidence of the acquisition of such property.
A non-refundable fee of Eur6,000 is payable to the Director General (Inland Revenue Department) upon submission of the application.
Minimum Residence Period
There is no requirement for an individual who has been granted a special tax status to reside in Malta for any period of time. The individual however must not reside in any other jurisdiction for more than 183 days in a calendar year.