Retiring to Malta
Malta Retirement Programme
Malta encourages foreigners to take up residence in Malta. The policy is supported by an attractive tax structure, amongst other advantages. Foreigners residing in Malta are not taxed on their worldwide income but only on Malta sourced income and on foreign income remitted to Malta. There are no wealth or real estate taxes. Whilst a tax on capital gains arising from the sale of immovable property does exist, this does not apply to the sale of one’s main residence if owned and occupied for at least 3 years. Malta’s tax legislation provides for relief from double taxation, whether through negotiated double tax agreements with a substantial number of countries worldwide, or through unilateral provisions. Certain foreign income remitted to Malta qualifies for a reduced withholding rate of foreign tax (this applies typically to dividends, interest and royalties), or is exempt from foreign tax (this applies typically to private pensions and to certain capital gains). The provisions of each particular treaty entered into by Malta must, however, be consulted to determine eligibility.
Malta is an excellent place to retire at any age hence the introduction of the Malta Retirement Programme appeases the requirements of many EU, EEA or Swiss nationals whose main income is from pensions, retirement schemes and plans and lifetime or temporary annuities. Prospective applicants should always seek advice from an knowledgeable Authorised Registered Mandatory proficient in the various Malta residence schemes so as to assess which Malta Resident Scheme is more suitable for their requirements.
Applications can only be submitted through an Authorised Registered Mandatory like Octave Corporate Services.
Once an EU / EEA / Swiss national has acquired the right to reside in Malta in terms of a Registration Certificate, one may also apply for a tax status in terms of the Malta Retirement Programme (MRP). Put simply, the entire pension/s must be declared in Malta and the pension/s shall constitute at least 75% of the total income chargeable to tax in Malta. Tax shall be a flat rate of 15% on the gross pension/s that shall be chargeable to tax in Malta. There is a minimum tax liability of €7,500 per annum which is increased by €500 for each dependent. Husband and wife must pay a minimum of €8,000. All individuals resident in Malta and benefitting from the Malta Retirement Programme must not reside in any other single jurisdiction for more than 183 days in any year and must also reside in Malta for a minimum of 90 days a year averaged over any five-year period.
In order to qualify for the Malta Retirement Programme status, the applicant must either own property or lease property in Malta or Gozo. Lease must be taken for not less than a twelve month period and evidenced by a certified lease agreement submitted together with the application.
The minimum amounts are as follows:
- Purchase of Property in Malta €275,000
- Purchase of Property in Gozo €250,000
- Lease of Property in Malta €9,600 annually
- Lease of Property in Gozo €8,750 annually
Octave Corporate Services is Authorised as Registered Mandatory for the Malta Retirement Programme and Malta High Net Worth Scheme. Contact us for more information.