The Global Residence Programme Rules (GRP Rules) came into force as from 1 July 2013 and are applicable to ‘third country nationals’ who are not citizens of the EU, EEA or Switzerland.
The GRP Rules are intended to replace the Residence Scheme for High Net Worth Individuals applicable to non-EU / non-EEA / non-Swiss Nationals.
The applicant must not be a ‘long-term resident’ of Malta, thus, shall not have long-term resident status in terms of the Status of Long-term Residents (Third Country Nationals) Regulations, as well as not have resided legally and continuously in Malta for 5 years. Upon successful application for the GRP Rules, the applicant will benefit from a special tax status.
Who can apply?
The eligibility criteria for an individual to avail himself/herself from the GRP Rules include:
1. The beneficiary is a third country national and is not a Maltese, EEA or Swiss national;
2. The beneficiary does not benefit under the Residents Scheme Regulations, the High Net Worth Individuals – EU / EEA / Swiss Nationals Rules, the High Net Worth Individuals – non-EU / non-EEA / non-Swiss Nationals Rules, the Malta Retirement Programme Rules, the Qualifying Employment in Innovation and Creativity Rules or the Highly Qualified Persons Rules;
3. The beneficiary is in possession of a ‘Qualifying Property Holding’ refer definition below.
4. The beneficiary is in receipt of stable and regular resources which are sufficient to maintain himself/herself and his/her dependents without recourse to the social assistance system in Malta;
5. The beneficiary is in possession of a valid travel document;
6. The beneficiary is in possession of sickness insurance in respect of all risks across the whole of the EU normally covered for Maltese nationals for himself/herself and his/her dependents;
7. The beneficiary is fluent in Maltese or English;
8. The beneficiary is a fit and proper person
The above conditions must be fulfilled on an ongoing basis and it must prove to the satisfaction of the Commissioner for Revenue that such applicant satisfies all of the conditions.
The GRP Rules provide for a flat rate of 15% on any income arising outside Malta which is remitted to Malta (‘remittance basis’) with a minimum annual tax charge of €15,000 for any year of assessment.
Any ncome of a beneficiary, the beneficiary’s spouse and children that is not chargeable to tax under the GRP Rules at the rate of 15% is subject to a flat tax rate of 35%.
Payment of Tax
Tax is payable by 30th April of the year preceding the year of assessment, or on the day that the special tax status is granted.
In order to obtain a special tax status under the GRP Rules, (a) an application form and (b) a questionnaire must be submitted to the Commissioner for Revenue through the service of an ‘Authorised Registered Mandatory’ and be accompanied by a non-refundable administrative fee of €6,000 (€5,500 where property is in the South).
Qualifying Property Holding
This is defined as an immoveable property situated in the Maltese islands and occupied as a primary residence. The qualifying property must be either (i) purchased in Malta for a consideration of €275,000 or more, or in Gozo or the South of Malta for a consideration of not less than €220,000; or (ii) rented at a cost of €9,600 per annum for a property situated in Malta, or for €8,750 per annum for a property situated in Gozo or in the South of Malta;
Definition of ‘South of Malta’
This includes the following towns and villages.:
Birzebbugia, Cospicua, Fgura, Ghaxaq, Gudja, Kalkara, Kirkop, Luqa, Marsascala, Marsaxlokk, Mqabba, Paola, Qrendi, Safi, Santa Lucija, Senglea, Siggiewi, Tarxien, Vittoriosa, Xghajra, Zabbar, Zejtun, Zurrieq,
Legal Notice 167 of 2013
The above information is being provided as a general guide only and should not be considered as a substitute for professional advice.
Prepared By: Marvic Gili