Highly Qualified Personnel Programme
With Malta establishing itself as a place from where to conduct international business, the Government has sought to assist and complement growth with the introduction of rules intended to attract skilled professionals and facilitate the relocation of businesses to Malta. Such rules secure an attractive Malta tax treatment of employment income derived by highly qualified personnel.
Under such rules, expatriates receiving income from a qualifying contract of employment in Malta may opt to pay tax at a flat rate of 15% on such income.
This reduced flat rate of tax is applicable to senior employees of companies licensed by the Malta Financial Services Authority or the Lotteries and Gaming Authority, as well as companies holding an air operators’ certificate issued by Transport Malta, or an aerodrome license issued in terms of the Air Navigation Order. Specific senior positions representing an eligible office include:
- Chief Executive Officer, Chief Risk Officer, Chief Financial Officer, Chief Operations Officer, Chief Technology Officer, Chief Commercial Officer;
- Portfolio Manager, Chief Investment Officer, Senior Trader/Trader, Senior Analyst, Actuarial Professional, Chief Underwriting Officer, Chief Insurance Technical Officer, Odds Compiler Specialist, Head of Research and Development, Aviation Continuing Airworthiness Inspector, Aviation Flight Operations Inspector, Aviation Training Manager, Aviation Flight Operations Manager and Aviation Ground Operations Manager;
- Head of Marketing, Head of Investor Relations;
- Chief Executive Officer with undertakings holding an aerodrome license issued by the relevant authority.
In addition, the relevant contract of employment must provide for minimum wages of € 75,000 – excluding the value of any fringe benefits. It is to be noted that no Malta tax would be chargeable on employment income in excess of € 5,000,000.
In order to be considered as a qualifying beneficiary, an individual must:
- derive income subject to tax and received 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;
- be domiciled in any country other than Malta;
- be an employee subject to an employment contract under Maltese law;
- prove to the competent authority that he/she is in possession of the required specific competence and professional qualifications;
- fully disclose and declare for tax purposes emoluments received from a qualifying contract of employment;
- prove to the competent authority that he/she performs the activities of an eligible office;
- be in receipt of regular resources to sufficiently maintain himself/herself and the family without recourse to social assistance in Malta;
- reside in accommodation comparable to a normal family in Malta, and adhering to all general health and safety standards in force in Malta;
- have valid travel documentation and insurance cover for him/her and the family.
Furthermore, the favourable 15% tax rate is final and cannot be reduced by means of double taxation relief, credits or set-offs of any kind.
Taxpayers already benefitting from the incentives for investment services and insurance expatriates under the Income Tax Act are excluded from this scheme.
Finally, the reduced rate of tax of 15% would only apply for a consecutive period of five years for EU/EEA and Swiss nationals whilst this is reduced to four years for third-country nationals. This period commences in the year in which the individual is first liable to tax in Malta. Any income derived after this timeframe has expired would be charged to tax in Malta at the standard progressive rates of tax applicable to individuals.