Malta residence permit under the Programme Global Resident

The Global Residence Programme Rules, 2013

An attractive Residence Programme for third country nationals

INTRODUCTION

The Global Residence Programme Rules were introduced by virtue of legal notice 167 of 2013 and came into force with effect from 1st July 2013. The special tax status for high net Worth individuals for non-EU/EEA and Swiss Nationals (“HNWI”) issued in 2011 has been replaced with the GRP Rules with effect from 30th June 2013. The GRP Rules are set to attract third country nationals (being persons outside the EU, EEA and exclude Swiss nationals) who wish to buy high value property in Malta, whilst being able to benefit from a residence permit in Malta. Further incentives are given to those who seek to invest in the south of Malta or in Gozo.

TAX TREATMENT

Individuals who qualify under the GRP Rules are taxable at the rate of 15% on foreign source income remitted to Malta with the possibility to claim double taxation relief.Any other income of the aforementioned persons that is not covered by these Rules shall be charged as separate income at the rate of 35%. Persons who have a long term resident status in terms of the status of long-term Residents (Third country nationals) Regulations or applies for such status, will be subject to tax on any income accruing in or derived from Malta or elsewhere (whether received in Malta or not) at the normal rates of tax under the income Tax act.A minimum tax of € 15,000 is payable by the holder of the tax status in respect of any year of assessment, as opposed to the minimum tax cap of € 25,000 for the beneficiary and € 5,000 for each of his dependent under the previous HNWI rules. such minimum amount will be payable by not later than the 30th April of the year in which the income is received in Malta and such payment must be accompanied by a return made to the Commissioner that provides proof that all the requirements continue to be satisfied.

Localities for the purposes of the definition of ‘South of Malta’ include Birzebbugia, Cospicua, Fgura, Ghaxaq, Gudja, Kalkara, Kirkop, Luqa, Marsascala, Marsaxlokk, Mqabba, Paola, Qrendi, Safi, Santa Lucija, Senglea, Siggiewi, Tarxien, Vittoriosa, Xghajra, Zabbar, Zejtun and Zurrieq.

ELIGIBILITY

To apply for the special tax status under these Rules, an individual shall:

1. be represented by an authorized registered mandatory;
2. be a third country national and a non-Maltese, EEA or Swiss national;
3. be in possession of a health insurance for himself and his dependants;
4. have stable and regular resources;
5. pass a Fit and Proper test;
6. be in possession of a valid travel document; and
7. be fluent in one of the official languages of

Furthermore, the applicant must not be a person who benefits under the Residents Scheme Regulations, the high net Worth individuals – EU/EEA/Swiss Nationals Rules, the high net Worth individuals – Non-EU/EEA/Swiss Nationals Rules, the Malta Retirement Programme Rules, the Qualifying employment in Innovation and Creativity (Personal Tax) Rules or the Highly Qualified Persons Rules.The Commissioner for Revenue shall determine in writing that an applicant is granted the special tax status under the Rules.
A non-refundable one-off registration fee of € 6,000 (€ 5,500 in the case of applications involving a qualifying property holding in the south of Malta) must be paid upon application.
Under the HNWI rules, third country nationals needed to place a € 500,000 bond with the government and an additional € 150,000 per dependant. Under the new GRP rules, no such bond will be required.
For the application of the special tax status, the beneficiary, who is not a long-term resident, is required to hold a Qualifying Property Holding being either:

• an immovable property in Malta for a value of not less than € 275,000 or if the property is located in the south of Malta or in Gozo, the value shall not be less than € 220,000; or
• rents an immovable property in Malta for not less than € 9,600 annually or where the property is located in the south of Malta or Gozo, the value shall not be less than € 8,750.

In terms of the GRP Rules, the special tax status may be inherited by a dependant of the deceased beneficiary who:

• a. has inherited the property that was the primary residence of such beneficiary; or
• b. rents a qualifying rented property immediately after the demise of the said beneficiary provided that the dependant satisfies all the other requirements under the Rules.

CONTINUING OBLIGATIONS

The GRP Rules list a set of continuing obligations that need to be satisfied by all successful applicants, being that the individual:

1. must not become a Maltese, EEA or Swiss national;
2. must retain in holding of the Qualified Property;
3. must not become a long-term resident;
4. must retain insurance for himself/herself and his/her dependants and continue to have stable resources; and
5. must not stay in any other jurisdiction for more than 183 days in a calendar year.

The GRP Rules also set up special reporting obligations being the filing of an annual tax return and other notifications that must be complied with.

5 Stars Europe is an authorized registered mandatory for the purpose of assisting with the application of the tax status contained under these Rules.