SPECIAL PROGRAMME UNPP FOR UNITED NATIONS PENSIONS IN MALTA

SPECIAL PROGRAMME UNPP FOR UNITED NATIONS PENSIONS IN MALTA maltaway

The United Nations Pension Programme (UNPP) in Malta

In 2015, with Legal Notice 184, Malta introduced the United Nations Pensions Programme (UNPP), a special tax regime for individuals who:

• Are not Maltese citizens;
• Are not permanent residents or long-term residents of Malta;
• Receive a pension from the United Nations (or a widow’s/widower’s benefit), at least 40% of which is transferred to Malta.

Why consider Malta as a tax residence

Malta is a strategic and advantageous jurisdiction for UN pensioners who wish to transfer their tax residence to Europe. Among the main advantages are:

• Privileged geographical location, in Europe and in the heart of the Mediterranean;
• English as the official language;
• Membership of the Schengen area, with full freedom of movement;
• Favourable climate and good quality of life;
• Total exemption of UN pensions from local taxation, if the programme requirements are met.

For more information on transferring your residence to Malta, to see how the Maltese territorial taxation system works and to check all the available residence programmes, I recommend reading our guide on Moving to Malta: a complete guide to residence and taxation for individuals.

Eligibility criteria

To be eligible for the UNPP programme, applicants must meet the following requirements:

1. Not be a Maltese citizen or permanent or long-term resident of Malta;
2. Receive a UN pension (or widow’s pension), at least 40% of which must be remitted to Malta;
3. Own property in Malta, either through:
4. Purchase of a property with a minimum value of €275,000 (or €220,000 if located in southern Malta or Gozo), or
5. Lease agreement with a minimum annual rent of €9,600 (€8,750 for properties in southern Malta or Gozo);
6. Have adequate health insurance covering the beneficiary and any dependent family members;
7. It is permitted to hold non-executive positions on the boards of Maltese companies or participate in unpaid activities at public institutions, trusts, foundations or organisations engaged in philanthropic, educational or research and development activities in Malta;
8. Pay a non-refundable administrative fee of €4,000 by submitting a specific application to the competent authority through an authorised representative (Maltaway’s partner is on the list of authorised representatives).

Tax regime applicable to UNPP programme beneficiaries

Malta does not apply a worldwide taxation regime, but rather a territorial taxation system. This generally means that:

Foreign income not remitted to Malta is not subject to taxation;
No taxes are paid on ‘clean capital’ remitted to Malta and on ‘capital gains’ generated abroad and partially or totally transferred to Malta

Beneficiaries of the UNPP programme enjoy the following benefits:

• Total exemption from taxation on UN pensions (or widow’s benefits) remitted to Malta;
• A reduced rate of 15% on all other foreign income remitted to Malta;
• A fixed rate of 35% on any income generated in Malta by the beneficiary or their dependants;
• Obligation to pay a minimum annual tax of €10,000, applied to income generated outside Malta and received in Malta, excluding income from UN pensions or widow’s benefits.

In general, it is possible to consider moving to Malta as a pensioner, as there are several favourable tax regimes applicable even if you do not hold a specific United Nations pension.

How to transfer your residence to Malta as a pensioner

As a pensioner, you can decide to transfer your residence to Malta by submitting an application in accordance with the ordinary rules.

If you then decide to transfer your pension under a tax exemption scheme (i.e. in cases where this is possible, generally for INPS pensioners and not for public sector pensioners, the pension is transferred gross and taxed in the new country of residence), the ordinary taxation rules will apply, with tax brackets ranging from 0 to 35% (which is still lower than in Italy).

It is also possible to move to Malta and apply for a special 15% tax relief scheme for your gross pension, for which we are authorised intermediaries.

SPECIAL RESIDENCY SCHEME FOR PENSIONERS IN MALTA

In 2012, and then amended in 2014, new rules were introduced in MALTA with the Malta Retirement Programme – for RETIREES who are EU/EEA/Swiss citizens (excluding Maltese citizens) but also for non-EU citizens, which guarantees a favourable tax regime:

• A flat rate of 15% on any foreign source of income received in Malta by them or their dependent family members, subject to a minimum annual tax of €7,500 and an additional €500 for each dependent family member and home care assistant.

The main conditions are:

1. receiving a foreign pension that must be received in Malta and must constitute at least 75% of the beneficiary’s taxable income.
2. purchasing or renting a property in Malta or Gozo that must serve as their main residence with a minimum value in Malta of €275,000 or €220,000 in southern Malta and Gozo. Alternatively, renting at a minimum annual rent of €9,600 if the property is located in Malta and €8,750 if the property is located in southern Malta or Gozo.
3. Having health insurance.
4. Being present in Malta for at least 90 days per calendar year, calculated over a period of 5 years. Furthermore, they cannot remain in any foreign jurisdiction for more than 183 days per year.
5. Payment of a government fee of €2,500, by submitting a specific application to the competent authority through an authorised representative (Maltaway’s partner is on the list of authorised representatives).

For further information, advice and residence programs and tax regime applications, please contact us.

CONTACT MALTAWAY for International Relocation, Pensions and Special Schemes for International Organisations

For any clarification, advice, legal opinion, support with procedures and questions regarding both pension transfers and special taxation schemes for International Organisations, please do not hesitate to contact us. Maltaway’s professionals offer you over 40 years of international practice.