The United Nations Pensions Programme

Special Tax rates

An individual who has been granted this special tax status will be exempt from tax on the receipt in Malta of a UN Pension Income or Widow’s/ Widower’s Benefit.

Conditions to satisfy

• The individual is not a permanent resident nor a long term resident of Malta and not a Maltese national;
• The individual is in receipt of a UN pension or a Widow’s/ Widower’s Benefit, of which at least 40% is received in Malta;
• The individual is not in an employment relationship. However, he may still hold a non-executive post on the board of a company resident in Malta and partake in activities related to any institution, trust or foundation of a public character, and any other similar organisation or body of persons, which are also of a public character, that is engaged in philanthropic, educational or research and development work in Malta;
• The individual is not a beneficiary in terms of any of other special tax programme;
• The individual owns or rents an immovable property which the individual occupies as his principal place of residence worldwide. The values of the property need to be as follows:

1. If owned: Malta € 275,000 Gozo: € 220,000;
2. If rented: Malta € 9,600 p.a. Gozo: € 8,750 p.a.;

• He is in receipt of a stable and regular resources income which are is sufficient to maintain himself and his dependents without recourse to the social assistance system in Malta;
• Is in possession of a valid travel document as well as medical insurance which covers himself and his dependents;
• He can adequately communicate in one of the official languages of Malta, either Maltese or English; and
• He is a fit and proper person.

Tax implications

The receipt in Malta of a UN Pension Income or Widow’s/Widower’s Benefit is exempt from tax. Foreign sourced income which is remitted to Malta, excluding income from UN Pension or Widow’s/ Widower’s Benefit, will be taxed at a flat rate of 15%. This also applies to foreign sourced income received in Malta by the beneficiary’s spouse and children. Any other income of the beneficiary, his spouse and children, including income arising in Malta, will be subject to tax at the rate of 35%.

Minimum tax requirements

Beneficiaries of special tax on the foreign sourced income remitted to Malta will need to pay a minimum tax of €10,000
annually and a further €5,000 in the event that both spouses are in receipt of a UN Pension.

Annual compliance

• Regular payments through the provisional tax system;
• Filing an annual income tax return.

Household staff

Household staff may reside in the qualifying property with the beneficiary. The individual providing the service is required to provide such service in whole or in part within the qualifying property and would have been in an employment relationship with the beneficiary for at least two years prior to the application date. It is important that the rendering of such services by the household staff is regulated by a contract of service. Such staff will be subject to the normal progressive rates of tax.

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