Special Tax Rate – August 2014 Update

04 Oct 2013

2 min read

It was reported that a “total of 320 professionals who have taken up residence in Malta are benefiting from a maximum tax rate of 15% on their €75,000-plus salaries”.

Over the past few years the different ‘schemes’ which have been put in place by the Maltese administrations have left results and have in fact attracted a large number of individuals to our islands wishing to avail of a special tax rate.

The ‘residence schemes’ have evolved from the Permanent Residence Scheme (which was applicable to all), to the High Net Worth Individual Scheme (which was split up into two branches; one applicable to EU/ EEA and Swiss nationals, and the other applied in the case of third country nationals). The latter was then replaced by the Global Residence Program while the Residence Program Rules have recently substituted the former branch of HNWI, now having the same thresholds as the Global Residence Program.

Another successful scheme has been that of the Highly Qualified Persons, which involves a set of specific tax rules intended to attract top expertise and skill in the financial services, remote gaming and aviation sectors, enabling operators in these sectors to attract and recruit the highest qualified, experienced and senior professionals. Senior employees engaged by licensed / recognised operators in the financial services, remote gaming and aviation sectors may benefit from a flat rate of 15% on employment income derived in respect of work or duties carried out in Malta. The eligibility is dependant on various matters but one would need to initially satisfy the basic salary (exclusive of the annual value of any fringe benefits) which has to be at least €80,100 in terms of a contract of employment (the €80,100 is adjusted in terms of the Retail Price Index for 2013 – this basic salary is adjusted every year).

For further information about how GVZH Advocates can help you with your tax requirements kindly contact us here.