Malta's New Individual Tax Programme Rules

The rules will come into force on 1 January 2027 and bring together a number of existing special tax regimes under a single legislative framework. The objective is to provide a more streamlined regime for qualifying individuals seeking to establish their residence in Malta while benefitting from a favourable tax treatment on foreign-sourced income.

The new rules establish four distinct routes through which eligible individuals may apply for special tax status:

1. Global Resident Status under Rule 3(1)(a);
2. EU, EEA and Swiss Resident Status under Rule 3(1)(b);
3. Retired Pensioner Status under Rule 3(1)(c); and
4. UN Pensioner Status under Rule 3(1)(d).

The Global Resident Status route is intended for third-country nationals who are neither Maltese, EU, EEA nor Swiss nationals and who do not hold long-term resident status in Malta. The EU, EEA and Swiss Resident Status route is available to EU, EEA and Swiss nationals who are not Maltese nationals and are not permanent residents of Malta. The Retired Pensioner Status and UN Pensioner Status routes are targeted respectively at pensioners and recipients of a United Nations pension or Widow's and/or Widower's Benefit.

Eligibility Requirements

Applicants under all four routes must satisfy a number of common conditions.

A key requirement is the holding of a qualifying property in Malta which serves as the individual's primary residence. A qualifying property may consist either of:

• a qualifying owned property acquired for a minimum consideration of €700,000; or
• a qualifying rented property subject to an annual lease of at least €14,000.  

The qualifying property must be occupied as the beneficiary's principal place of abode and may generally only be inhabited by the beneficiary, qualifying dependants and approved household staff.

In addition, applicants must:

• possess stable and regular financial resources sufficient to support themselves and their dependants without recourse to Malta's social assistance system;
• hold valid sickness insurance covering risks normally covered for Maltese nationals throughout the European Union;
• be in possession of a valid travel document;
• be able to communicate adequately in one of Malta's official languages;
• be non-domiciled in Malta and not intend to establish domicile in Malta within five years from the date of application; and
• satisfy the fit and proper test.  

Certain conditions apply specifically to particular routes. Applicants under the Retired Pensioner Status route must receive a pension which constitutes at least 75% of their chargeable income, with the entirety of that pension being received in Malta. Applicants under the UN Pensioner Status route must be in receipt of a United Nations pension or Widow's and/or Widower's Benefit, of which at least 40% must be received in Malta.

Tax Treatment

The programme provides for a 15% tax rate on foreign-source income remitted to Malta by the beneficiary and certain qualifying family members, subject to the availability of double taxation relief where applicable.

However, the preferential rate is accompanied by minimum annual tax liabilities which vary depending on the route under which special tax status is obtained.

• Beneficiaries holding Global Resident Status or EU, EEA and Swiss Resident Status are subject to a minimum annual tax liability of €35,000.
• Individuals qualifying under the Retired Pensioner Status route are subject to a minimum annual tax liability of €15,000.
• A different treatment applies to beneficiaries under the UN Pensioner Status route. A United Nations pension or Widow's and/or Widower's Benefit received in Malta following the granting of special tax status is exempt from Maltese income tax. Any other foreign-source income remitted to Malta is subject to tax at the rate of 15%, subject to a minimum annual tax liability of €20,000.

Income that does not qualify for the preferential 15% rate is generally taxable at 35%.

Application Process and Administration

Applications for special tax status must be submitted to the Commissioner for Tax and Customs through an authorised registered mandatary. The application is subject to a non-refundable administrative fee of €8,500.  Where special tax status is granted, such status generally applies for a period of five years, with the possibility of renewal for further periods of five years. A renewal application is subject to a non-refundable administrative fee of €2,500.

Beneficiaries are required to continue satisfying all programme conditions throughout the duration of the status, including the maintenance of a qualifying property, compliance with the relevant residence requirements and the timely payment of the applicable minimum tax. Failure to comply with the conditions may result in the cessation of special tax status.

Transitional Provisions

The Rules also include important transitional provisions aimed at ensuring continuity and certainty for individuals already benefiting from Malta's existing residence and special tax programmes. In particular, any special tax status granted, or any application submitted, on or before 31 December 2026 will remain valid until 31 December 2031, thereby safeguarding existing arrangements during the transition to the new framework.

Forvis Mazars' view

The introduction of the Individual Tax Programme Rules forms part of Malta's continued efforts to refine its legislative and fiscal framework for internationally mobile individuals. Through the consolidation of several existing special tax regimes into a single set of rules, the framework seeks to simplify the application and administration of special tax status whilst preserving the distinct routes available to different categories of applicants. The measures also reinforce Malta's established position as a jurisdiction offering tailored residence and tax solutions for high-net-worth individuals, pensioners and other eligible persons considering relocation to the Island.