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What’s Inside
Malta Retirement Programme provides qualifying retirees with special tax status, enabling foreign pension income to be taxed at a flat 15% rate, subject to a minimum annual tax, while offering legal residence in Malta. The Programme is open to retired individuals receiving pension income as their primary source of income. This publication outlines the legal framework, eligibility requirements, property conditions, tax treatment, treaty access, and the administrative process for obtaining Special Tax Status and Maltese residence permit. It also highlights the importance of cross-border tax coordination to ensure alignment between Malta and the retiree’s country of pension source.
Key Legal Points
- Foreign pension income remitted to Malta is taxed at a flat 15% rate, subject to a minimum annual tax.
- The Programme provides tax treatment certainty under Maltese law once Special Tax Status is granted.
- Beneficiaries may avail themselves of Malta’s double tax treaties, subject to treaty provisions.
- Applicants must satisfy property, minimum stay, and fit-and-proper requirements.
- Special Tax Status is administered by the Malta Tax and Customs Administration (MTCA).
Who is this for
Retired individuals seeking tax-efficient residence within the EU, particularly those receiving foreign pensions and wishing to establish structured, compliant tax residence in Malta.
What This Means for You
With proper structuring, retirees may achieve predictable taxation of foreign pension income at 15% while benefiting from Malta’s treaty network and stable legal framework.
Legal Framework
The Malta Retirement Programme is established under Subsidiary Legislation 123.88 of the Laws of Malta, issued under the Income Tax Act (Chapter 123 of the Laws of Malta). The rules provide for the granting of Special Tax Status to qualifying retired individuals.
The process is administered by the Malta Tax and Customs Administration (MTCA). An application for Special Tax Status is submitted to the MTCA through an authorised representative. Upon approval, the individual is formally granted special tax status under the Programme.
Following approval of Special Tax Status, the applicant may then proceed to apply for a residence card with the competent Maltese immigration authorities. The tax approval and residence process are legally distinct but coordinated in practice.
The Programme does not confer citizenship and does not automatically alter the applicant’s tax position in another jurisdiction. Its purpose is to regulate Maltese tax treatment of qualifying retirees who establish residence in Malta under its provisions.
Eligibility Criteria
To qualify under the Malta Retirement Programme, an applicant must be in receipt of a pension as the main source of income. The pension must constitute at least 75% of the applicant’s chargeable income.
The applicant must not be engaged in full-time employment in Malta, although certain limited non-executive or advisory roles may be permissible subject to regulatory parameters.
Applicants must hold qualifying health insurance covering risks in Malta and must satisfy fit-and-proper requirements, including due diligence and background verification.
In addition, applicants must comply with minimum physical presence requirements in Malta and may not reside in any other single jurisdiction for more than 183 days in a calendar year.
The Programme is designed for individuals who are genuinely retired and who wish to establish Malta as their principal place of residence within a structured tax framework.
Property Requirements
Applicants must either purchase or rent qualifying residential property in Malta or Gozo.
If purchasing property, the minimum value threshold applies as set out in the applicable rules. If renting, a minimum annual rental value must be satisfied. The property must serve as the applicant’s primary residence in Malta.
The property must be retained for as long as the individual benefits from Special Tax Status. Sub-letting is not permitted under the Programme rules.
The property requirement reinforces the genuine residence dimension of the Programme and ensures substantive ties to Malta.
Tax Treatment: 15% Special Tax Status Explained
The core feature of the Malta Retirement Programme is the granting of Special Tax Status, under which foreign pension income remitted to Malta is taxed at a flat 15% rate, subject to a minimum annual tax liability.
Foreign-source income not remitted to Malta is generally not subject to Maltese tax under Malta’s remittance basis of taxation. Maltese-source income is taxed at a flat rate of 35% the standard progressive rates.
Special Tax Status provides legislative certainty: once granted, the beneficiary’s tax treatment is governed by the Programme rules, provided ongoing compliance requirements are satisfied.
Importantly, Malta does not impose wealth tax, inheritance tax, or municipal taxes on worldwide assets, further contributing to tax predictability for retirees.
Access to Malta Double Tax Treaties
Beneficiaries of the Malta Retirement Programme may avail themselves of Malta’s extensive network of double tax treaties, subject to the specific provisions of each treaty.
Malta currently maintains more than 70 double tax agreements. Where treaty conditions are satisfied, pension income may benefit from relief mechanisms such as exemption or foreign tax credit relief, depending on the applicable treaty.
The interaction between Malta’s 15% Special Tax Status and the pension source country’s domestic law must be carefully analysed. Some jurisdictions impose exit taxes, ongoing reporting obligations, or limitations on treaty access depending on residency status.
Cross-border coordination is therefore essential to ensure that the Maltese tax position is aligned with the retiree’s country of departure or pension origin.
Endorsement and Vetting Process
Applications are subject to due diligence and compliance review. The MTCA evaluates whether the applicant satisfies pension thresholds, health insurance requirements, property conditions, and background checks.
The granting of Special Tax Status is discretionary and contingent upon full compliance with the Programme rules.
Once approved, beneficiaries must continue to meet annual compliance obligations, including minimum tax payment and residence conditions, to retain their status.
Practical Cross-Border Considerations for Retirees
While Malta offers clarity and tax efficiency, retirees must evaluate:
- Whether their home jurisdiction recognises cessation of tax residence
- Whether pension payments remain taxable at source
- Whether exit tax or reporting obligations apply
- Whether treaty relief is automatic or claim-based
Strategic pre-relocation planning is critical to avoid dual residence conflicts or unintended tax exposure.
Malta’s stability, EU membership, healthcare infrastructure, and English-speaking environment further support its attractiveness as a retirement destination.
How Our Private Client Tax Advisors Can Help You
Applications under the Malta Retirement Programme may only be submitted through an Authorised Registered Mandatory (ARM). Our firm is licensed as ARM00103 and is authorised to file and manage Malta Retirement Programme applications before the Malta Tax and Customs Administration.
Beyond the application process, our Private Client Tax team coordinates cross-border advice to ensure that your Maltese tax position aligns with the tax rules of your country of departure and the jurisdiction from which your pension is sourced. We work alongside foreign tax advisors where necessary to ensure treaty access, residency defensibility, and long-term compliance.
FAQs
What is the Malta Retirement Programme?
The Malta Retirement Programme grants Special Tax Status to qualifying retirees, allowing foreign pension income remitted to Malta to be taxed at a flat 15% rate, subject to a minimum annual tax and ongoing compliance requirements.
Is the 15% tax rate automatic?
No. The 15% rate applies only after approval of Special Tax Status by the Malta Tax and Customs Administration and provided that eligibility and compliance requirements continue to be satisfied.
Can beneficiaries use Malta’s double tax treaties?
Yes. Beneficiaries may access Malta’s double tax treaties, subject to the specific provisions of each treaty and proper coordination with the pension source country.
Does the Programme lead to Maltese citizenship?
No. The Malta Retirement Programme grants tax status and residence rights but does not confer citizenship.
Can I work in Malta under this Programme?
The Programme is intended for retirees. Full-time employment is not permitted, although limited non-executive roles may be possible subject to regulatory conditions.
