Guest post: “Instead of just selling citizenship and an EU passport, the government will now throw in deemed residency status and voting rights, with no strings attached”
This piece came in as a comment, but it merits being put up as a guest post because it raises a few most pertinent points. The writer is a Canadian citizen born and raised in Malta by Maltese parents.
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This latest twist in the sad story of the IIP scheme could open up the floodgates to a much larger group of voters who, up to this point in time, and with very good reason, have not been entitled to vote in Maltese or EU parliamentary elections. I am referring here to the many thousands of Maltese citizens who have made their homes outside of the EU. Let’s call this group the “Extra-EU citizens”.
Earlier this week, the European Commission told Malta, in no uncertain terms, that citizens living in other EU member states must not be denied the right to vote, because this is an ongoing violation of the mobility rights that are guaranteed to all EU citizens.
No one can argue with reasoning. Let’s call this second group the “Intra-EU citizens”. There is a theory among MLP apologists (like that stalwart Mintoffian, Eddie Privitera, according to several of his recent TOM comments) that most of the Maltese who live and work “in Brussels” are PN supporters. Whether that is true or not, of course, is anyone’s guess.
Now suddenly, after resisting all arguments in favour of a residency requirement as evidence of a true link to Malta for would-be citizens, the government has come up with this cockamamie scheme to grant IIP applicants an ID card and deemed residency status (and with that, the right to vote) seemingly from the minute their applications hit Minister Mallia’s desk, based solely on the one criteria that they must have purchased or rented a property of modest value in Malta.
So in other words, as we read between the lines of the prime minister’s strange pronouncements during his press conference earlier this week, instead of just selling citizenship and an EU passport, the government will now throw in deemed residency status and voting rights, with no strings attached.
The Legal Notice has yet to be published, and so we cannot know for sure, but the PM’s statements suggest that all of this could happen even before government’s share of due diligence exercises have been completed. The idea seems to be that an ID card will be issued proactively, on Day 1 after the IIP applicant has purchased or leased a flat in Malta, so as to start the clock ticking on the six-month pseudo-residency requirement.
Presumably, the Legal Notice will provide for some means of cancelling the ID card, and the associated right to vote, if the holder’s IIP application is ultimately declined, but who really knows with this lot?
It struck me as awfully coincidental that within 24 hours of the EU commission pronouncement regarding the rights of Intra-EU citizens, the government came up with this change. I have a sinking feeling that this is all part of a plan.
Let’s compare these newly-minted Maltese voters, the IIP citizens, with the Extra-EU citizens. Many Extra-EU citizens actually do own, or stand to inherit, property in Malta. Many maintain investments or other assets in Malta. They certainly have family and social ties with Malta going back countless generations, they actually do spend time in Malta, and many of them speak some mangled form of Maltese. They pay taxes to Malta when they inherit property, when they earn rental income on it, and when they sell it.
In other words, they already check off virtually all the boxes that an IIP applicant is required to meet, and many other boxes that an IIP applicant should be required to meet. The sole exception of course is that an Extra-EU citizen has not paid €650,000 to the government and additional fees to Henley & Something.
So Malta will have four classes of citizenship: Extra-EU citizens; Intra-EU citizens; IIP citizens; and citizens who actually reside in Malta. Three of these categories obtain and maintain their citizenship without residing in Malta, but only the first category will be denied the right to vote.
In essence, Extra-EU citizens will continue to be denied the right to vote because – unlike the IIP citizens – they will not have paid for that privilege.
As I see it, Version 3.0 of the IIP scheme is a constitutional challenge waiting to happen, and I suspect this government has already calculated that there is a slim chance that it would ever win such a challenge. It doesn’t want to. Why stop at securing the loyal support of IIP citizens in future elections, when the MLP could be instrumental in extending voting rights to thousands of emigrants?
If there is a perceived danger to MLP prospects in future elections now that Intra-EU citizens will have unfettered voting rights, the emigrant vote could well serve as a counterbalance.
It would also permanently, and dangerously, skew all future election results.
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I was gobsmacked, and remain speechless, at the fact that the European Commission appears to have accepted the one year residency requirement as an addendum to the scheme to sell passports, without having accepted a clear definition of what residency means in the Maltese context.
It would appear to me that they may have had assurances from the “high-powered” Maltese negotiating team, headed by Parliamentary Secretary Owen Bonnici, that the Maltese statute does provide hard and fast rules on residency requirements.
Well, it doesn’t, and if the European Commission accepted that presumed assurance without checking the facts first, then they’ve been taken for a ride.
There are no specific rules or official Inland Revenue guidelines on the manner in which the residence status should be determined for Maltese income tax purposes.
Article 4 of the Malta Income Tax Act refers only to ‘ordinary residence’ and not to ‘residence’. The Act does not define “ordinary residence” but defines “resident in Malta” to mean: “an individual who resides in Malta except for such temporary absences as to the Commissioner may seem reasonable and not inconsistent with the claim of such individual to be resident in Malta”.
This ‘definition’ is open to interpretation because it has a lot of implications rather than factual statement. For example, ‘temporary absences’ in this definition seems to imply that ‘residence’ implies a habitual and continuous physical presence. It would therefore mainly depend on the length of a person’s stay in Malta.
It also worryingly implies that the Commissioner of Inland Revenue holds discretionary powers in the determination of the ‘residence’ status of an individual.
Historically, the Maltese Inland Revenue would typically treat as a ‘resident’ of Malta an individual physically present in Malta in the aggregate for a number of days equivalent to 183 days or more in a tax (or calendar) year.
It would be fair to mention that when determining ‘ordinary residence’, in terms of Inland Revenue practice it is necessary to take into account the regularity and frequency of an individual’s visits to Malta, family and business ties and nature of that person’s visits to Malta to determine whether a person is an ordinary resident of Malta for Maltese tax purposes.
WE MUST NOT FORGET, that the key and lock in all of this is the double tax treaty agreement that would have been signed with the country of the individual’s nationality. Most treaties have tie-breaker rules that would normally apply on a hard and fast definition of residence.
In the Maltese case (rather than in other countries) this is wide open to interpretation at the discretion of a government-appointed individual: the Commissioner of Inland Revenue.
This is the crux of the residency loop-hole, I feel.
That, and the potential pressure points applicable by this very loophole on Malta’s new citizens.
In a voter scenario where the ID card with “electronic features” comes into being manipulated by this Labour Party that has cheated and misrepresented its way into Government, this loophole is a lethal combination for the preservation of Democracy as it is classically defined.
That the base act of selling passports is amoral, stands.
That this central policy was kept of the election campaign fraudulently and with intention, stands.
That Citizenship has now become a Financial Services product, and as such subject to higher EU regulation than “just” citizenship, stands.
That the Government is guilty of creating a situation of unfair competition in the Financial Services market with the granting of “a contract” of exclusivity to Henley & Partners, stands.
That this apparent precedent will unfairly impact the whole of the EU and other territories, stands.
That Malta is seeking to gain where it morally shouldn’t, stands
No amount of spin before us Maltese or the EU is going to change the basics: this is wrong.
Corruption should have a wider application and not be so narrowly applied to bribes, trafficking of humans and drugs.
This is an entirely corrupt governance.
There is nothing remotely sane about it.
Complacency and an incomplete picture of the worst case scenarios – which is the Labour option on any good day – is what allows it to happen.
* “That this central policy was kept out of the election campaign fraudulently and with intention, stands”
I am still perplexed as to why the EU only accepted a ONE year requirement attached to the Muscat-Muscat-Sale-of-Passports scheme.
I expected the Opposition to ‘oppose’ this with all its might; alas, it was a complete let down. The Opposition should have requested a meeting with the EU commissioner concerned and made itself clear. Again, it failed even in doing this.
Let us now hope that the Opposition will secure the right of those who REALLY are Maltese and working abroad, to vote in the General elections. At least, it should make this as one of its priorities. I am fully aware that the PN tried to pass a law in this regard when in Government, only to be blocked by Dr. Alfred Sant’s opposition. It now has the pronouncement of the EU itself to back its claims. We are on the brink of a banality: those who purchase a Maltese-EU passport will have the right to vote and those who have a God-given right to vote because this country belongs to them, will not.
This should be a wake-up call for Dr. Busuttil and the PN Opposition. Honestly, wake up!
The Prime Minister and his ministers are deliberately confusing citizenship, residence, visa, dual citizenship, EU, non-EU in the public mind. Now try and explain ‘domicile’ to them.
This whole citizenship-passport-vote-buying scam-scheme will go down in our history with the same controversy, negativity, indignance and condemnation as the notorious Interdett did.
Its repercussions will eventually turn around to bite its creators, Muscat and Mallia, in their ample arses.
The relevant legal notice has already been issued. There is no provision for the cancellation of ID cards.
What about tax compliance for the year’s residency?
Can I assume that now for one whole year I have a tax free status in Malta like all those IIP applicants?