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Legal Notice 69 of 2020 - Amendments to the Malta Retirement Programme, Global Residence Programme and the United Nations (UN) Pensions Programme

Deloitte Malta tax alert

12 May 2020

By virtue of Legal Notice 69 of 2020, a number of amendments were introduced in relation to the main residence programmes in Malta.

Malta Retirement Programme

With effect from 1 January 2020, the Malta Retirement Programme Rules shall be extended to apply also to all individuals who are not EU/EEA or Swiss nationals. Therefore, individuals may now benefit from the Malta Retirement Programme, irrespective of their nationality (on condition that they satisfy all the requirements outlined by the Rules).

The definition of ‘household staff’ has also been amended. It no longer requires the individual to have been employed by the beneficiary for at least two years prior to the filing of the application.

Following the death of the beneficiary, the special tax status enjoyed by the deceased, shall be granted to the dependent who has inherited the primary residence of the beneficiary or who rents the qualifying property immediately after the death of the beneficiary. In order to benefit, the heir must prove that all requirements to qualify as a beneficiary are satisfied.

With effect from 1 January 2020, in order to qualify as a beneficiary, an individual must satisfy the following conditions:

a) They hold a qualifying property holding;

b) they are not a person who benefits under the Global Residence Programme Rules; the High Net Worth Individuals – EU / EEA / Swiss Nationals Rules; the High Net Worth Individuals Rules – Non-EU / EEA / Swiss Nationals Rules; the Highly Qualified Persons Rules; the Qualifying Employment in Aviation (Personal Tax) Rules; the Qualifying Employment in Innovation and Creativity(Personal Tax) Rules; the Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities (Personal Tax) Rules; the Residence Programme Rules; the Residents Scheme Regulations or the United Nations ("UN") Pensions Programme Rules;

c) they are not a Maltese national;

d) they are in receipt of a pension, as supported by documentary evidence, all of which is received in Malta and constitutes at least 75% of the beneficiary’s chargeable income;

e) they are in possession of a valid travel document;

f) they are in possession of sickness insurance in respect of all risks across the whole of the European Union normally covered for Maltese nationals for themselves and their dependents;

g) they are not domiciled in Malta and that they do not, within five years from the date of application, intend to establish their domicile in Malta; and

h) they are a fit and proper person.

Should the beneficiary acquire permanent residence or long-term residence status, the tax treatment in terms of the Malta Retirement Programme shall be lost and they shall be taxable in Malta at the standard rates.

Amendments to the Global Residence Programme Rules S.L. 123. 148

An amendment was introduced to the Global Residence Programme Rules, in terms of which the tax status may be transferred to a dependent of a beneficiary who has passed away once the dependent proves to the satisfaction of the Commissioner for Revenue that they satisfy all the conditions listed in terms of the Rules to qualify as a beneficiary.

Amendments to the Residence Programme Rules S.L. 123. 160

An amendment was introduced to the Residence Programme Rules, in terms of which the tax status may be transferred to a dependent of a beneficiary who has passed away once the dependent proves to the satisfaction of the Commissioner for Revenue that they satisfy all the conditions listed in terms of the Rules to qualify as a beneficiary.

Amendments to the United Nations (UN) Pension Programme Rules S.L. 123. 165

An amendment was introduced to the United Nations Pension Programme Rules, in terms of which the tax status may be transferred to a dependent of a beneficiary who has passed away once the dependent proves to the satisfaction of the Commissioner for Revenue that they satisfy all the conditions listed in terms of the Rules to qualify as a beneficiary.

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