Holders could therefore reside indefinitely in Malta and could enter and leave Malta as and when required without the need of any other formalities.
In September 2011, this scheme has been replaced with a new one, referred to as the High Net Worth Individuals Rule (HNWI). The following is a list of incentives and advantages applicable to beneficiaries recognised as High Net Worth Individuals:
- A Low flat rate of income tax of 15% with a minimum tax liability of € 20,000 after double taxation relief per annum, plus an additional €2,500 per dependent. The tax is calculated on foreign income (excluding capital gains) remitted to Malta;
- High Net Worth Individuals are not subject to tax on worldwide income. Foreign source income is taxed in Malta to the extent that it is received in or remitted to Malta;
- There is no real estate tax in Malta. Tax on capital gains arising from the sale of real estate in Malta does exist but residents are exempt if they have used the property as their main residence for three consecutive years and the property is disposed of not later than one year of vacating it.
- Malta’s tax legislation provides for relief from double taxation, whether through negotiated double tax agreements with a substantial number of countries worldwide, or through unilateral provisions. Certain foreign income remitted to Malta qualifies for a reduced withholding rate of foreign tax (this applies typically to individuals, interest and royalties), or is exempt from foreign tax (this applies typically to private pensions and to certain capital gains). The provisions of each particular treaty entered into by Malta must, however, be consulted to determine the treatment of each item of income in each particular case.
