The UN Pensions Programme (‘UNPP’), came into effect through Legal Notice 184 of 2015 to offer a special tax status to EU / EEA / Swiss Nationals as well as to Third Country Nationals who receive a United Nations Pension or Widow’s / Widower’s benefits, provided that at least 40% of such pension / benefits are received in Malta. The special tax status is not available to Maltese Nationals or to persons who are long-term residents of Malta. Individuals benefitting from the UNPP may hold a non-executive post on the board of a company resident in Malta. Such individuals may participate in activities related to any institution, trust or foundation of a public character and in any other similar organisation or body of persons, also of a public character, that is engaged in philanthropic, educational or research and development work in Malta. A beneficiary may also have household staff providing a service in his Qualifying Property, as long as all the criteria in his respect have been met, however such staff cannot enjoy the preferential tax benefits afforded to the beneficiary.
Beneficiaries of the UNPP are exempt from income tax in relation to the portion of the UN pension received or benefits in Malta and are further subject to a preferential tax rate of 15% on any other income arising outside Malta and received in Malta by the beneficiary, the beneficiary’s spouse, children and other dependents as defined, with the possibility of granting relief from double taxation in terms of the Maltese Income Tax Act. However, the minimum amount of tax payable in respect of such income (excluding the UN pension / benefits) shall not be less than €10,000 per year, and not less than €15,000 per year in the event that both spouses are in receipt of a UN Pension. Special reporting obligations (the filing of an annual declaration together with the annual tax return) must be complied with.
An individual may only apply for special tax status under the UNPP if he:
- is in receipt of a UN pension or a widow’s / widower’s benefit and remits 40% of such pension or benefit to Malta;
- is not a Maltese national;
- does not reside in any other jurisdiction for more than 183 days;
- is not a beneficiary under another special tax status in Malta;
- owns a Qualifying Property (namely a property in Malta that exceeds the minimum value threshold of €275,000 or leases a property for more than €9,600 per annum; the values for property in the south of Malta or in Gozo are slightly lower). The Qualifying Property cannot be let or sub-let;
- can show that he has access to regular income that is sufficient to maintain him as well as his dependants without need to turn to Maltese social assistance;
- is in possession of valid travel document;
- can show sufficient health insurance cover for himself and his dependants;
- can communicate adequately in English or Maltese; and
- is a ‘fit and proper’ person in accordance with due diligence checks carried out in his respect. (This requirement needs to be satisfied in relation to all individuals that are dependants over the age of 18 as well as household staff mentioned in the application form).
An application for special tax status under the UNPP is to be submitted to the Commissioner of Inland Revenue. Applications and the necessary supporting documentation, including evidence of meeting the criteria mentioned above, are to be submitted exclusively through the services of an authorised registered mandatory (‘ARM’). However, an applicant need not be the owner or lessee of a qualifying property at time of application and may submit the certified final deed or lease agreement, as the case may be, at a later stage. A non-refundable administrative fee of €4,000 (or €3,500 where the Qualifying Property is in the South of Malta or in Gozo) is payable before the application can be processed.