In 2011, Malta introduced specific tax rules, namely the Highly Qualified 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 available globally.
In essence, the scheme is designed to attract highly qualified persons to occupy eligible offices with companies licensed and/or recognized by the MFSA, the LGA and companies holding an Air Operators’ Certificate issued by the Authority for Transport in Malta
In accordance with these Rules, applicants that successfully register under the scheme are entitled to benefit from a fixed reduced tax rate of 15 % on all income derived from their employment in Malta. Should the income from an qualifying employment exceed €5,000,000 per annum, no further tax is chargeable on the excess.
Eligiibility for application
An individual is considered to be eligible for application to the special tax status, if he satisfies the following conditions:
1. be employed with a company that qualifies as an eligible office in terms of the regulations. The senior positions specified in the Rules include the following:
– Chief Executive Officer,
– Chief Risk Officer (including Fraud and Investigations Officer),
– 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, and
– Aviation Ground Operations Manager,
– Head of Marketing (including Head of Distribution Channels),
– Head of Investor Relations.
2. be entitled to remuneration of at least €81,205 (exclusive of the annual value of any fringe benefits) in terms of a contract of employment (figure adjusted in terms of the Retail Price Index for 2014);
3. provide evidence that the contract of employment was drawn up to exercise genuine and effective work in Malta;
4. provide evidence that he/she has five years experience in the specific field and has the necessary qualifications in order to carry out the employment;
5. 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;
6. reside in accommodation regarded as normal for a comparable family in Malta;
7. not be domiciled in Malta;
8. be in possession of a valid travel document;
9. be in possession of adequate health insurance;
10. not benefit under any alternative incentives available in Malta;
11. 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 Lotteries and Gaming Authority (LGA) or the Authority for Transport in Malta (TM), as may be applicable, for a formal determination confirming eligibility to the favourable tax rate.
Income shall not be construed to be income from qualifying contract of employment if it is paid by the employer who has received a benefit or benefits under business incentive laws or arrangement in terms of the business incentive laws or if it is paid by a person who is related to the employer who has received a benefit or benefits under any business incentive laws or arrangement in terms of business incentive laws.
Duration of Scheme:
The tax benefits under the Rules are available to EEA and Swiss nationals for a maximum consecutive period of 5 years and to non-EU citizens for a maximum consecutive period of 4 years (commencing in the year in which the taxpayer is first liable to tax in Malta). The 5 and 4 year maximum periods would be further reduced in respect of EEA and Swiss nationals and citizens of non-EU Member States who were employed under a contract of employment requiring the performance of duties in Malta up to 2 years prior to the 1st January, 2010.
How can we help?
Advocates Primei can guide prospective applicants throughout the whole application process and provide applicants with any tax and legal support.