In 2013 Malta introduced a Global Residence Scheme allowing for third country nationals and nationals of the EEA or Switzerland, to apply for special tax status, thus attracting these nationals to benefit from this Programme. The individuals may not be long term residents, however, they are not precluded from working in Malta, provided that they satisfy the requisite conditions for obtaining a work permit.
 

The beneficiaries may also have household staffs providing a service in their qualifying property, as long as all the requisite procedures are satisfied.

 

Eligibility
An applicant must be an individual:

 

1. Who is NOT:

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• An EU national; or

• A national of Iceland, Norway or Liechtenstein; or

• A national of Switzerland.

• A beneficiary of any of the following tax programmes, unless the individual has renounce to the right of the benefits provided under any of the following programmes:

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• Resident Scheme Regulations;

• High Net Worth Individuals Rules;

• Malta Retirement Programme Rules;

• Qualifying Employment and Creativity Rules; or

• Highly Qualified Persons Rules.

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2. Owns or rents a qualifying owned or rented property which the individual occupies as his principal place of residence worldwide.

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• A qualifying owned property means an immovable property acquired for a consideration of not less than:

 

• €275,000 for a property situated in Malta other than in the south of Malta; or

• €220,000 for a property situated in Gozo or in the south of Malta.

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• A qualifying rented property means an immovable property taken on at a lease, for a period not less than 12 months and of not less than:

 

• €9,600 per annum for an immovable property situated in Malta other than in the south of Malta; or

• €8,750 per annum for an immovable property situated in Gozo or in the south of
  Malta

 

The immovable property, whether owned or rented, needs to be occupied as the principal place of
residence worldwide of the applicant.
 

The persons that may reside in the property are:

 

• The beneficiary;

• The dependants; and

• The household staff.

 

Furthermore, the applicant must be:

 

• In receipt of stable and regular resources that are sufficient to maintain himself/herself and the dependants without recourse to the social assistance system of Malta;

• In possession of a valid travel document;

• In possession of sickness insurance covering the applicant and the dependants across the European Union;

• Able to adequately communicate in Maltese or English;

• Fit and proper as evidence by a police conduct certificate.

 

All of the above criteria must be met by the applicant in order for him to be eligible to benefit from the Global Residence Programme.

 

Application Procedure

 

The Process to apply for the Global Residence Programme is straight-forward and non-bureaucratic owing to the programme design and specialist assistance offered by Debono & Associates. Moreover, applications may only be submitted through an Authorised Registered Mandatary. Debono & Associates is an Authorised Registered Mandatary in terms of the Global Residence Programme Rules.

Step 1: Appointment of an Authorised Registered Mandatary to the Global Residence Programme Application.
 

Step 2: Debono & Associates, acting as a licensed and Authorised Registered Mandatary consults with prospective applicants and assists in the preparation of application forms and supporting documents.

Step 3: Application submitted to the Commissioner for Revenue by an Authorised Registered Mandatary together with a non-refundable administrative fee of €6,000 or €5,500 in the event that the qualified owned property is situated in the south of Malta.

Step 4: Upon receipt of the application and the administrative fee, the application is then checked for completeness and is vetted accordingly. An acknowledgement letter is sent to the Authorised Registered Mandatary indicating the progress of the application. In the case of missing information or documentation, these are indicated therein.

Step 5: A valid application is then forwarded for due diligence process. Upon completion of this process, the Authorised Registered Mandatary, is notified of the outcome.
 

Step 6: Upon receipt of a positive outcome, a face to face meeting is scheduled with the applicant and the Authorised Registered Mandatary and a letter of intent is issued and sent to the Authorised Registered Mandatary and the application may continue to be processed. The letter of intent is accompanied by a notice of primary residence which would need to be completed and executed and submitted in original.

Step 7: The applicant is granted special tax status in accordance with the Global Residence Programme and is thereafter referred to as the beneficiary.

 

Tax Treatment & Minimum Requirement

 

The Beneficiary will now be subject to a tax rate of 15% on any income that is received in Malta from foreign sources. This special tax rate is applicable on income received as aforementioned both by the beneficiary and the dependants. Moreover, this special tax rate applies from the year of confirmation of the special tax status up to the year of cessation of status, both years included. Any other income that is chargeable to tax in Malta in terms of the Income Tax Acts of the beneficiary and the dependants, is charged at the rate of 35%.

The following individuals qualify as dependants:
 

• The beneficiary’s spouse;

• Minor children including minor children and children who are in the care and custody of the beneficiary or of the spouse;

• Children including adopted children and children who are in the care and custody of the beneficiary or of the spouse, who are not minors but who for the reason of circumstance of illness or disability of a serious nature, are unable to maintain themselves.

 

A minimum tax condition is imposed on the beneficiary and the dependants. A minimum tax of €15,000 is to be paid annually which minimum tax is chargeable on the income arising outside Malta and is received in Malta. The minimum tax must be paid in full in the year in which the special tax status is confirmed or cancelled.

The beneficiary is still subject to payment of provisional tax payments except for the first year.
 

Where the beneficiary becomes long term resident in Malta or has applied for long term resident status, the special tax status granted in terms of the Global Residence Programme shall cease to have effect and the beneficiary will be taxable on a worldwide basis at the applicable rate stipulated in the Income Tax Act.

 

How Can Debono & Associates Assist?

 

Debono & Associates is a firm specialising in tax, audit, accountancy and advisory services based in Malta. The firm is licensed to act as an Authorised Registered Mandatary for the Global Residence Programme and has successfully assisted and represented clients operating the Global Residence Programme application process.

Our team offers full support to the applicants. Our services range from preliminary advice, preparation of application forms, collation of documents, due diligence, local representation, tax advisory services, real estate scouting and other specialist solutions.

For further information on how Debono & Associates may be of assistance, kindly either contact us on advice@debonoassociates.com and/or visit our expertise tabs accessible through our website; www.debonoassociates.com.

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Disclaimer: The information contained in this publication is a general commentary and should not be used, relied upon or treated as substitute for professional advice. Readers should take specific advice from a qualified professional when dealing with specific situations. Debono & Associates and associated companies reserve the right to change, modify or correct the information contained in this publication at any time without notice.

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