Highly Qualified Persons
Whilst Malta is a premium location to live and work in (regularly voted one of the best and safest places in the world), such highly qualified, experienced and senior personnel may also be entitled to benefit from a favourable Malta tax rate of 15% chargeable on employment income derived from his/her Malta employer. The Malta tax rate is reduced to nil on qualifying employment income exceeding €5,000,000 per annum.
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 (or in respect of any period spent outside Malta in connection with such work or duties). The senior positions specified in the Rules include the following:
- Chief Executive Officer;
- Chief Risk Officer (including Fraud and Investigations Office);
- Chief Financial Officer;
- Chief Operations Officer (including Aviation Accountable Manager);
- Chief Technology Officer;
- Chief Commercial Officer;
- Portfolio Manager;
- Chief Investment Officer;
- Senior Trader/Trader;
- Senior Analyst (including Structuring Professional);
- Actuarial Professional;
- Chief Underwriting Officer;
- Chief Insurance Technical Officer;
- Odds Compiler Specialist;
- Head of Research and Development (including Search Engine Optimisation and Systems Architecture);
- Aviation Continuing Airworthiness Manager;
- Aviation Flight Operations Manager;
- Aviation Training Manager;
- Aviation Ground Operations Manager;
- Head of Marketing (including Head of Distribution Channels);
- Head of Investor Relations.
In order to benefit from this favourable tax treatment, the employee must:
- be employed to fill a senior position (or to perform equivalent activities) and be in possession of professional qualifications or acceptable professional experience;
- be entitled to remuneration of at least €86, 938 (exclusive of the annual value of any fringe benefits) in terms of a contract of employment and adjusted in terms of the Retail Price Index for 2018;
- be in receipt of stable and regular resources which are sufficient to maintain him/herself and his/her family members without recourse to domestic social assistance;
- reside in accommodation regarded as normal for a comparable family in Malta;
- not be domiciled in Malta;
- be in possession of a valid travel document;
- be in possession of adequate health insurance;
- not benefit under any alternative incentives available in Malta;
- be protected as an employee under applicable Maltese laws.
The Rules provide that no Malta tax would be chargeable in respect of qualifying employment income exceeding €5,000,000.
An individual eligible to opt to pay tax on employment income at the reduced rate of 15% (in terms of the Rules) would be required to apply to the Malta Financial Services Authority (MFSA), the Malta Gaming Authority (MGA) or the Authority for Transport in Malta (TM), as may be applicable, for a formal determination confirming eligibility to the favourable tax rate. The eligible individual would then be required to submit a prescribed form (endorsed by the MGA/MFSA/TM) to the local tax authorities together with his/her tax return.
The Rules do not apply in respect of individuals who were employed under a contract of employment requiring the performance of duties in Malta for a period exceeding 2 years preceding the 1st January, 2010.
The tax benefits under the Rules are available to EEA (including EU) and Swiss nationals for a consecutive period of 5 years (commencing in the year in which the tax payer is first liable to tax in Malta). Such EEA/Swiss nationals, who avail themselves of this tax benefit, shall be eligible upon application, for a one-time extension of 5 years, making their qualifying period a maximum of 10 years of assessment. The one-time extension is not applicable to individuals who have been a resident in Malta prior to the 1st of January 2008. Non-EU citizens benefit under the rules for a maximum consecutive period of 4 years (commencing in the year in which the taxpayer is first liable to tax in Malta). Such non-EU nationals, who avail themselves of this tax benefit, shall be eligible upon application, for a one-time extension of 4 years, making their qualifying period a maximum of 8 years of assessment. This extension shall not be available to any person who was resident in Malta prior to the 1st January 2008, and that the maximum qualifying period shall not exceed a consecutive period of twelve or fifteen years, as the case may be, in the case of a person who is not domiciled in Malta, commencing from the year preceding the first year of assessment in which that person is first liable to tax
