Malta has for many years been a location of choice for retirees looking for a friendly place in the sun to retire to within the EU. Described fondly as a melting pot of cultures and peoples, a place where crime hardly exists, the locals are hospitable, the health care is excellent, the climate close to perfect and has consistently been voted as one of the top 3 places in the world to retire to. A Country which boasts of a relatively low cost of living, has English as an official language and has no wealth taxes, Malta has now further enhanced its attractiveness by launching a special tax status for retirees.
In terms of the Malta Retirement Programme Rules, published in September 2012, EU, EEA or Swiss nationals desiring a peaceful retirement in welcoming Malta may, subject to qualifying for the special tax status, benefit from a flat 15% Maltese tax rate on their foreign source income which is received in Malta.
In order to be eligible for this beneficial tax one must satisfy the following criteria:
The applicant should be in receipt of a qualifying pension, which entitles the applicant to periodic pension payments, all of which are received in Malta, and which should constitute at least 75% of the beneficiary’s taxable income;
Other conditions include the following:
Following a successful application, the beneficiary would be entitled to a flat 15% rate of tax upon all foreign source income received in Malta
The minimum tax payable in Malta is EUR7,500 in respect of the beneficiary with an additional EUR500 for every listed dependent or special carer. For the purpose of listing the special carer in terms of these rules, the special carer must be an individual who has been providing substantial and regular curative or rehabilitative health care services to the beneficiary or dependent in a systematic manner for at least 3 years prior to the application.
It should be noted that independently of whether this tax status is opted for, Malta asserts jurisdiction to tax on the twin concepts of residence and domicile. Pursuant to which, persons either not ordinarily resident or not domiciled in Malta are taxable on any income and certain capital gains arising in Malta and on income arising outside Malta that is received in Malta. Such persons are not taxable on any capital gains arising outside Malta, whether received in Malta or not.
Depending on one’s specific circumstances we would be able to guide you as to the various available options. Should you be interested in finding out more and exploring these available options, we would be delighted to hear from you.
© 2020 KPMG, a Malta civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.