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What tax benefits are there to retire in Malta?
I am a Canadian senior who is interested in relocating to Malta. I heard about tax incentives for retirees to come to the island. What kind of benefits does the country provide? What is the visa application like? Does one need to be of independent means, or could I work if I wanted to do?
Answers
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There is a Global Residence Programme (GRP) in Malta. Maybe it will be interesting to you. The Global Residence Programme, launched in 2013, enables qualifying applicants and their dependents to benefit from a flat tax rate of 15% subject to satisfying certain conditions, including: 1) Is not a national of Malta or any other EU/EEA state;2) Holds a qualifying property by way of purchase at a minimum value of €220,000 or by way of lease at a minimum rent of €8,750 per annum for properties in Gozo or the South of Malta (per a predefined list of qualifying areas). For properties purchased anywhere else, the minimum property value is €275,000 or minimum rent of €9,600 per annum for leaseholds. Notes: the property cannot be sublet, only the beneficiary and their dependents per the Programme may reside in the property. The beneficiary is not benefitting from any other special tax status or residence programme; pays an annual minimum tax of at least €15,000 upon income arising outside of Malta which is received in/remitted to Malta; applicants receive regular and stable income to maintain themselves and their dependents; does not spend more than 183 days in any other single jurisdiction; holds a comprehensive health insurance covering himself and all dependents for all risks across the whole of the EU; can adequately communicate in one of Malta’s official languages (Maltese or English).
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The question is rather open-ended. Ideally, we would be provided with more information. For instance, is your domicile of origin in Canada? On a general note, foreigners living in Malta, by becoming tax residents in Malta (spending more than 183 days and having ties to the island) are only taxed on their Maltese income and on overseas income that is remitted to Malta. They are not taxed on their worldwide income. Additionally, there are no property or wealth taxes, which is also very attractive. A number of immigration programs are available, such as the Malta Residence and Visa Program, which provides applicants the right to reside, settle and stay indefinitely in Malta, and travel visa-free throughout the Schengen Area. It is important to note that this program is not a tax status program and does not automatically allow the applicant to work in Malta. One can apply separately for a work permit and a tax residency certificate, should the need arise.
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Malta offers the chance for individuals to retire in Malta through the Malta retirement program, which offers various tax incentives and opportunities. Unfortunately, this program does not apply to third-country nationals outside the European Union. However, you can still qualify for another program, the Malta Residence and Visa Program. Unlike the Malta retirement program, an applicant would be able to continue working. This program falls under the Immigration Act and is available for applicants who are third-country nationals, along with their dependents (i.e., spouse, children, parents and parents-in-law). Once the residency certificate is issued, this will provide the beneficiary and his/her dependents the right to reside, settle or stay in Malta indefinitely, plus the ability to freely move around the countries in the Schengen Area. It also provides them with the opportunity to live in a country with a moderate cost of living, with a direct access for the beneficiary and any approved dependant of age to apply for a work permit. It also provides the opportunity and the ability to live in a safe country which is both politically and economically stable, along with access to high-level educational institutions and access to renowned English schools. For an applicant to qualify for the Malta Residence and Visa Program, prior to receiving the residency certificate, he has to meet the following qualifications and requirements: be at least 18 years of age; have an annual income of no less than 100,000 euros arising outside of Malta, or has in his possession of capital of not less than 500,000; have stable and regular resources which are sufficient to maintain him/herself and any of his/her dependents; be in possession of valid travel documents; be in possession of health insurance in respect of all risks covered for Maltese Nationals; be in possession of a clean police conduct from one’s birthplace as well as any country the applicant and his/her dependant/s have resided in for longer than six months in the past 10 years; be in possession of a clean police conduct from one’s birthplace as well as any country the applicant and his/her dependant/s have resided in for longer than six months in the past 10 years; has to a non-refundable initial fee of 5,500 that is to be settled upon submission of application; an additional 5,000 that is to be submitted per dependent (excluding children of main applicant and/or the spouse). Once the residency certificate is approved, the applicant is to meet the following criteria: pay the remaining contribution fee, amounting to 24,500, plus 5,000 per additional adult applicant, if applicable; pay card fees amounting to 27,50 per person per year; hold a qualifying property for a minimum of five years from the date of issuance of the residency certificate, either through the purchase of property of either a minimum of 270,000 for properties situated in Gozo or in the south of Malta or a minimum of 320,000 for properties situated in the rest of Malte, or rent a property of either a minimum 10,000 per annum for properties situated in Gozo or the south of Malta or a minimum of 12,000 per annum for properties situated in the rest of Malta; hold a qualifying investment of not less than 250,00 for a minimum of five years from the date of issuance of the residency certificate ("qualifying investment" means an investment in a form determined from time to time by Identity Malta having an initial value of 250,000).
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