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Maltese government publishes its position in case of a No Deal Brexit

Deloitte Malta Tax Alert

06 March 2019

With a population of an estimated 13,000 UK nationals residing in Malta, out of which approximately 5,000 are in employment, the Maltese government has announced the treatment of UK nationals in the event that the UK exits the EU without an agreement on the 29th March 2019.

UK nationals currently residing in Malta

The Maltese government has announced that UK citizens, who, on the 29th March 2019, shall be residing in Malta, shall continue to have the right to reside in Malta. The residence document they currently hold as EU nationals shall continue to be valid until a new residence document is issued, in view of their new immigration position.

The new document shall be issued in terms of EU regulations applicable to third country nationals, and shall be issued free of charge. Such document shall be renewable on expiry.

Malta shall effectively create a new and special immigration status for UK nationals, which shall be valid for a 10 year period.

The issue of new documentation shall be handled by Identity Malta.

UK nationals moving to Malta after the withdrawal date

UK nationals moving to Malta after the 29th March 2019 shall be granted residence documents valid for 10 years.

Fees currently applicable to third country nationals shall apply for the issue of residence cards to UK nationals after the 29th March 2019.

UK nationals shall have full access to the labour market for 10 years and shall therefore not be required to apply for an employment licence.

Health Care

The Health Care Convention of 1975 that provides for reciprocal health care coverage, shall continue to apply.

Status of UK students in Malta and Maltese students in the UK

Students will retain the fee status in force before the date of withdrawal.

Fee structures shall be agreed upon on a reciprocity basis for applications submitted after the 29th March 2019. Pending such agreements, the fees applicable to third country nationals shall apply.

Voting in elections

UK nationals shall be removed from the European Parliament electoral register, however they may continue to vote in local council elections.

Tax matters

UK nationals benefitting from a special tax status in terms of the High Net Worth Individuals and the Residence Programme will no longer qualify. They will have the option to register for other programmes applicable to non-EU citizens at no extra cost.

They shall continue to benefit from a 15% flat rate of tax.

Border controls

UK nationals already go through non-Schengen border points since the UK is not a Schengen country, however minimal checks are typically carried out on UK citizens arriving to Malta.

After the 29th March 2019, UK nationals will go through the same checks as third country nationals upon arrival at the airport or seaport.

Social security and other benefits

In a no deal scenario, A1s issued by the UK for UK nationals working in Malta will no longer be valid beyond 29th March 2019 and in the circumstances, UK nationals employed in Malta will be required to request an exemption under the procedure adopted for TCNs i.e. by providing evidence that they are paying their social security contributions in the UK, upon satisfaction of which the Social Security Department would issue an exemption from the payment of social security contributions in Malta.

Whilst contributions paid in the UK up to March 29th 2019 shall still be taken into account for future pension claims, contributions paid in the UK after 29th March 2019 shall no longer be considered for assessing Maltese pension entitlements.

Malta will continue to pay Old-Age, Survivors and Invalidity pensions to individuals resident in the UK.

Benefits paid in terms of the EU Social Security coordination rules shall no longer apply in case of UK nationals who are in a cross border situation between Malta and the UK. It is understood that this is relevant to only a limited number of cases.

Posting of Workers

Workers who are in cross-border situation between Malta and the UK shall no longer be insurable under the Maltese social security scheme.

Posting of workers shall no longer apply.

VAT Refunds

UK tourists shall be entitled to claim a refund of the VAT paid on items purchased in Malta and carried with them to the UK, subject to the completion of the necessary certifications by Customs.

UK Driving licences

As is currently the case with non-EU driving licences, UK driving licences may be used in Malta for up to one year.

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