Retirement programme for new high net worth individuals

The Ministry of Finance, the Economy and Investment announced a new tax programme for retirees from EU/EEA/ Swiss nationals to take up residence in Malta. This has been Malta's core market ever since the first Residence Scheme was introduced.

In line with other incentives, Government has retained a fixed tax rate of 15% with a minimum tax liability of €7,500 onto which €500 must be added for a dependent.

The Ministry said that the programme does not in any way cause a threat to the health issue in Malta as applicants would have to prove that they are either on the EU transposition of rights or prove that they have medical insurance.

Persons welcomed to the scheme will be in receipt of a recognised pension and may hold a non-executive post on the board of a company registered in Malta or partake in activities related to any institution, trust or foundation of a public character which is engaged in philanthropic, educational, research and development work in Malta. A novelty in the programme is that the minimum requirements for Gozo are less than the ones for Malta.

Any EU citizen who proves that he is not a threat to public health, public policy or public security has a right to live in Malta. The Malta Retirement Programme sets out minimum parameters in consideration of a flat rate of 15% tax:

• In line with statistics that have been procured from Estate Agents, the minimum purchase price of property has been set at €275,000 for Malta and €250,000 for Gozo. The minimum rent is €9,600 for Malta and €8,750 for Gozo.

• Applicant shall have to spend a minimum of 90 days in Malta per annum averaged over a five-year period (thus increase spending in the local economy). They must also not be in any other single jurisdiction for more than 183 days.

• The entire pension would have to be remitted and taxed in Malta (thus not allowing split income and paying minimum tax as happened with the previous Residence Scheme).

• 75% of the income chargeable to tax in Malta would have to arise from pension or similar income. "Pension" has a wide definition to include lifetime annuities, personal pension plans, occupational pension.

• The Malta Retirement Programme is a tax status and the applicant would first have to complete the formalities of a Registration Certificate (EU citizens) so the Programme does not interfere with Immigration Regulations. Moreover, the applicant would have to produce a Conduct Certificate and make an affidavit that he/she does not have any ongoing civil or criminal proceedings.

• There is an application fee of €2,500 making the administration of the Programme self-sufficient.

• There are provisions for carers that may want to accompany applicants to Malta.

• There are also provisions for applicants with a background/expertise that can be of benefit to Malta would be invited to sit on Boards in a non-executive post and/or national philanthropic organisations.

Demand for the scheme is considered to be substantial. The programme will be managed by the International Tax Unit of the Inland Revenue Department under the same arrangements for the other High Net Worth Individual (HNWI) schemes in force.