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The Malta Retirement Programme

Stable and Secure European Member State

Often Cited as 1 of the Best Countries in which to Retire or Work

Affordable Housing – Best in Health Care

In 2012, the Malta Retirement Programme, also known as the ‘MRP’, was launched and is specifically designed to attract nationals of the EU, EEA (Iceland, Norway or Liechtenstein), and Switzerland who are in receipt of a pension as their regular source of income.

Malta has always been an ideal place to retire. The Maltese islands’ warm climate, open door policy to foreigners and affordable accommodation has contributed in no small way to this.

What are the benefits?

There are several clear tax benefits for European individuals who qualify under Malta’s Retirement Programme.

  • No world-wide taxation
  • Foreign income not remitted to Malta is 0% tax rated
  • No inheritance taxes
  • 0% tax on foreign capital gains
  • Foreign Income received in Malta by any individual or his dependents is taxable at a flat rate of 15% from the date on which the applicant is has been confirmed. It is important that applicants are aware of the tax status date, as any remittances before this date is subject to tax at progressive rates which can be as high as 35% on income exceeding €60,000
  • Local source income taxable at 35%, including local bank interest, or dividend income, limited to 25% of total taxable income

Minimum Tax Payments & Requirements

Beneficiaries under the MRP need to submit an annual tax return, with an accompanying proof of remittance. MRP beneficiaries must ensure that they make the following minimum annual payments.

  • A minimum annual payment of €7,500 for the main applicant and €500 in respect of each dependent
  • In first year, no provisional tax payments and tax is paid on a pro-rata basis
  • Can apply for relief of double taxation provided minimum amount of tax payment is made.

Who May Apply?

An EU national or an individual from an EEA country including Iceland, Norway or Liechtenstein, as well as Switzerland, in receipt of a pension can apply.

Dependents may also apply under the programme, ‘dependents’ includes:

  • Spouse
  • Person with whom the beneficiary is in a stable and durable relationship
  • Unmarried minor children, including adopted children and those who are in the custody of the applicant and are financially dependent on the applicant
  • Children over the age of 18 who because of illness or disability are unable to maintain themselves.

Special carers may also come to Malta if they assist the applicant or any one of his dependents. Income received by special carers is subject to normal progressive rates of tax.

Conditions to Apply

Applicants, who are not beneficiaries under any other tax regulation in Malta, must satisfy a number of conditions including:

  1. Owns or Rents Property in Malta / Gozo

Applicants need to prove that they have acquired residence in Malta either by buying property in Malta or else through entering into a lease agreement.

Property purchase or lease is subject to an independent architect’s valuation and full details of the state of rental property must be included in the lease. Property is subject to minimum values as follows:

Purchase of Property€275,000€250,000
Rent of Property€9,600€8,750
  1. Documentary Evidence Requirements

Applicants must show that they are in receipt of a regular income, which can either be:

  • Periodic payments received in respect of past employment, or
  • Remuneration paid as lifetime or temporary annuities, or
  • Regular income from an occupational retirement scheme, personal overseas retirement plan or insurance policies.

Lump sum payments or capital sums received are not considered as regular income and cannot be taking into consideration as a valid means of self-sufficiency.

  1. Amount of Pension Remitted to Malta

All of the applicant’s pensionable income must be received by the applicant in Malta.

Minimum remittance requirements are:

  • €50,000 in the case where all foreign pension income is remitted to Malta

If an applicant’s pensionable income is not remitted to Malta, he or she will automatically lose his or her status under the Malta Retirement Programme.

Other income may also be received or earned in Malta. In this case, however it is important to ensure that pension income accounts for at least 75% of the total taxable income in Malta. In this case the pension received and remitted to Malta must be:

  • €37,500 foreign pension income where €12,500 is earned from other income.
  1. What other Documents do I need?

Anyone wishing to retire in Malta and reap the benefits of Malta’s favourable retirement programme must ensure that they have:

  • Valid travel document
  • Full EU health insurance, either through an reciprocal agreement with Malta or obtained by the applicant himself
  • Be considered as a fit and proper person – a police conduct certificate and a sworn declaration confirming that individual has no ongoing civil or criminal convictions
  • Applied in full for a Registration Certificate in Malta in terms of the Free Movement of European Nationals and their Family Members
  • Copy of acknowledgement of Registration Certificate in Malta or Residence Card/Document.
  1. Minimum Stay Requirements
  • An individual must reside in Malta for more than 90 days per year averaged over 5 years ie. 450 days
  • Does not stay in another country for more than 183 days in a calendar year

What are the costs?

  • Non-refundable administrative fee of €2,500

Can I still work after retirement?

Applicants may:

  • Hold a non-executive post on the board of a Malta company
  • Cannot be employed by a company in any capacity
  • Undertake activities related to institutions, trust or foundations, or any similar organisation or body of persons, which are of a public character  and which are engaged in philanthropic, educational, or research and development in Malta.

How can we help you?

Acumum is an  Authorised Registered Mandatory (ARM), licensed by the Government of Malta to apply on your behalf – engagement of an Authorised Registered Mandatory is a necessity in applying for special tax status under the Malta Retirement Programme.

Acumum can provide guidance on how to apply, including initial vetting of all documents before submission to the Malta Government.

Acumum’s qualified lawyers and accountants can also assist by helping you complete your annual income tax returns and to assist to ensure that you comply with all the necessary requirements under the Malta Retirement Programme.

Contact us on +356 2778 1700 or chat with us on Skype ID: acumum to discuss ways how you can benefit under the Malta Retirement Programme.