The Residence Programme (TRP) is a special tax status programme, launched in 2014 year, aimed at attracting EU, EEA and Swiss nationals who are interested in acquiring tax residence in Malta. A similar option for non-EU/EEA nationals is the Malta Global Residence Programme.
Basis for The Residence Programme
The aim of The Residence Programme (TRP) is to grant its beneficiaries with a Special Tax Status (STS) which entails a reduced tax rate of 15% on any foreign income remitted to Malta. The Malta Residence Programme (TRP) requires that an economically self-sufficient individual maintains a permanent address in Malta in the form of residential property purchased or rented in Malta or Gozo. The applicant must also be in receipt of stable and regular resources that are sufficient to maintain himself/herself and the qualifying family members without recourse to the Maltese social assistance system.
The applicant must also pay €15,000 as a minimum annual tax and a one time administrative fee of €6,000.
Taxation under The Residence Programme
Maltese residents under the TRP are not subject to tax in Malta on foreign sourced income not remitted to Malta, nor are they subject to tax on any foreign-sourced capital gains whether remitted to Malta or not.
Residents of Malta under the TRP are entitled to taxation at a flat rate of 15% on income that is received in Malta from foreign sources. This rate of tax will apply from the year of confirmation of the special tax status up to year of cessation of status, both years included. Any income arising in Malta is charged at a flat rate of 35%. This may include among other things, bank interest received from a local source, salary received from a local company or dividends received from a company registered in Malta.
Beneficiaries of special tax status granted in terms of The Residence Programme will need to pay a minimum tax of fifteen thousand euro (€15,000) annually and submit an annual tax return.
Residents under the TRP also benefit from Malta’s double taxation agreements existing with most European countries ensuring that tax is never paid twice upon the same income.
EU and EEA nationals, who do not envisage significant remittances of foreign income, may apply for Maltese residence card without application for the Special Tax Status (STS) which is granted only to TRP beneficiaries. In such case and depending on the residence status of the individual, the standard progressive tax rates will apply and there shall be no minimum annual tax to settle, leading to a generally lower tax liability.
The following is a summary of the tax system applicable to Maltese residence under this residence programme.
Summary of Malta Residence Tax Rules
|Basis of Taxation||Local Source, Remittance|
|Tax Rate for Foreign Source Income remitted to Malta||15%|
|Tax on Capital Gains outside Malta||Nil|
|Tax Rate for Local Personal, Business, Investment Income||35%|
|Minimum tax (per family)||€ 15,00|
|Taxation per dependent||Nil|
|Double Tax Treaty Relief||applicable|
|Taxation per dependent||Nil|
|Tax Residence Certificate||Process available|
Eligibility for The Residence Programme
Applications under The Residence Programme are open to EU, EEA and Swiss nationals. One application can include the main applicant, his/her spouse, financially dependent ascendants and other non-family members and dependent relatives that are shown to be bona fide members of the household. Children under the age of 25 are automatically eligible for inclusion.
Applicants must demonstrate their financial self-sufficiency and must be in possession of valid health insurance cover. The applicant is also required to submit a police conduct certificate issued not earlier than six months prior to the date of submission and confirm on oath that he/she is not subject to any civil or criminal proceedings.
A non-refundable fee is to be paid in respect of an application for special tax status under The Residence Programme. This administrative fee is of €6,000 except where the qualifying owned property is situated in the south of Malta, in which case the administrative fee is that €5,500.
Within 12 months of taking up residence under The Residence Programme, the residence permit holder needs to comply with the requirement of acquiring or renting property in Malta. Applicants are required to demonstrate that an address is available to them in Malta by buying or renting property in Malta.
Applicants applying under the TRP need to meet minimum property value requirements at €275,000 for acquisition of property in Malta and €220,000 for property acquisition in Gozo and the Southern Region of Malta. Applicants also have the option to rent property in Malta at €9,600 annual rent or rent property in Gozo or the Southern Region of Malta at €8,750 in annual rent.
It is important to note that no person other than the applicant and his/her dependants may reside in the qualifying property at any time and that the qualifying property may not be let or sub-let.
The following is a summary of the programmes rules on eligibility of applicants.
Summary of Malta The Residence Programme
|Eligible for inclusion in application:|
|Main Applicant’s spouse||Yes|
|Dependants||< 25 years|
|Taxation per dependent||Nil|
|Minimum Property Purchase Price / Annual Rent|
|Malta:||€275,000 / €9,600|
|Southern Region of Malta, Gozo||€220,000 / €8,750|
|Sickness Insurance Coverage||Required|
The Residence Programme: The Rules
Permit holders are required to reside not more than 183 days in any foreign jurisdiction in any year. The programme does not impose any formalities for evidencing any minimum residence requirement. Residents also need to demonstrate a valid sickness insurance coverage for all EU risks including Malta.
The Residence Programme is subject to the following conditions:
Residence Permit Conditions
|Maltese domicile||Not allowed|
|Maximum Residence in other countries||< 183 days|
|Employment, Business, Office in Malta||allowed|
The Residence Programme Applications
TRP Applications are to be submitted to the International Tax Unit via Authorised Registered Mandatories (ARM) authorised by the Maltese Government to handle applications and act as liaisons between the applicant and the Maltese authorities. Our immigration firm is registered as an authorised mandatory by the Maltese immigration and tax authorities according to Maltese law. Led by Dr Priscilla Mifsud Parker, our winning Immigration & Relocation Law team is the oldest specialised immigration law practice in Malta. We have successfully represented individuals and families ranging from expatriate retirees, emigrants seeking employment, applicants for work permits, to HNW individuals on the Forbes List.
We are able to advise you on the tax and legal implications and requirements of the Malta residence application process and indicate expected time frames based on the specific circumstances and nature of your application. Our advice covers the rules applicable to immigrating to Malta under a number of available residence programmes as well as practical relocation assistance ranging from transportation and insurance to schooling and health insurance coverage.