An analysis of tax residency programmes in Malta

Abstract

Purpose: The aim of this dissertation is to analyse the tax residence programmes currently offered in Malta, their performance and whether there is any room for improvement. By improving the application procedure, system of taxation and conditions in the programmes, a better service to High Net Worth Individuals willing to apply under one of these programmes, would be offered. Moreover, reference will be made to factors that limit the performance of these programmes such as other European Union (EU) countries that offer a tax incentive similar to ours. Design: The author achieved the objectives of the dissertation by carrying out semi-structured interviews with Tax Practitioners and the International Tax Unit (ITU). Findings: The findings reveal that the Maltese tax residence programmes offer a good tax incentive for expats who are willing to relocate to Malta. However, in truth, the demand is not as high as one would expect. The reasons for such a low demand will also be pointed out. Conclusion: Although the tax residence programmes are good in principle, from a practical perspective, there is room for improvement in both the application process and enforcement practices on preventing abuse. Out of all the tax residence programmes, the United Nations Pensions Programme (UNPP) is the least popular. Suggestions on how this particular programme can be improved will also be put forward. Value: This study is of considerable value for tax practitioners since it provides an in-depth research of the evolution of these tax residence programmes and can also benefit the Maltese authorities who could consider the recommendations put forward in this study in order to continue ameliorating these programmes.