Malta has enacted Legal Notice 20 of 2026, titled the Tax Treatment of Highly Skilled Individuals Rules, 2026 (the “Rules”), marking a significant reform of Malta’s preferential tax framework applicable to expatriate professionals. The Rules were published in January 2026 and apply to qualifying employment income derived as from 1 January 2026.
This legislation consolidates several previously distinct tax incentive regimes into a single, harmonised framework, reflecting Malta’s strategic objective to enhance its competitiveness in attracting and retaining highly skilled professionals across key economic sectors.
Legislative Context and Policy Objectives
Prior to the introduction of the Rules, Malta operated a number of sector-specific incentive schemes, including:
- the Highly Qualified Persons Rules,
- the Qualifying Employment in Innovation and Creativity (Personal Tax) Rules;
- the Qualifying Employment in Aviation (Personal Tax) Rules;
- the Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities (Personal Tax) Rules; and
- the Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules.
While effective, the coexistence of multiple frameworks resulted in increased administrative complexity and fragmented eligibility criteria.
The 2026 Highly Skilled Individuals Rules repeal and replace these legacy regimes with a unified legislative instrument. The stated policy objective is to simplify the tax landscape, provide legal certainty, and ensure consistency in the treatment of highly skilled individuals employed in Malta, irrespective of sector, subject to defined conditions.
Preferential Tax Treatment
At the core of the Rules is the introduction of a flat income tax rate of 15% applicable to qualifying employment income derived under a qualifying contract of employment.
Key features of the tax treatment include:
- The 15% flat rate applies to qualifying employment income up to a maximum threshold of €7 million per annum.
- Any employment income exceeding this threshold is subject to tax at the standard progressive rates applicable under Maltese law.
- The preferential tax treatment is granted for an initial period of five years, with the possibility of two further extensions of five years each, subject to continued satisfaction of the applicable conditions.
This structure provides both predictability and long-term planning certainty for qualifying individuals and their employers.
Eligibility Criteria
The Rules establish a comprehensive set of eligibility conditions, which must be satisfied cumulatively.
Income Threshold
The individual must earn a minimum annual remuneration of €65,000, exclusive of fringe benefits. This threshold is subject to periodic increases, set at increments of €10,000 every five years, ensuring that the regime remains targeted at genuinely high-value employment.
Professional Qualifications or Experience
Applicants must either:
- Hold recognised professional qualifications relevant to the qualifying employment; or
- Demonstrate a minimum of five years of relevant professional experience at a comparable level.
Employment Conditions
The qualifying employment must be genuine and effective, carried out in Malta under a qualifying employment contract. The Rules are intended to exclude artificial or purely formal arrangements.
Residence and Domicile
Eligibility is restricted to individuals who are not domiciled in Malta at the time of application. Applicants must also satisfy residence-related conditions, including the holding of suitable accommodation in Malta.
Additional Conditions
Applicants must further demonstrate:
- Sufficient and stable financial resources;
- Valid travel documentation; and
- Comprehensive health insurance coverage applicable in Malta for themselves and their dependents.
Eligible Offices and Regulatory Oversight
The Rules apply only to employment in an “eligible office,” as determined by reference to roles regulated or recognised by designated competent authorities. These include, inter alia:
- The Malta Financial Services Authority
- The Malta Gaming Authority
- Transport Malta
- Malta Enterprise
- The Office of the Chief Medical Officer
This mechanism ensures that the preferential tax treatment is reserved for senior or specialised roles within regulated or strategically important sectors of the Maltese economy.
Transitional Provisions
The Highly Skilled Individuals Rules contain transitional arrangements for individuals who were previously benefiting from legacy incentive schemes. Such individuals may, subject to satisfying the new eligibility requirements, apply to be brought within the scope of the 2026 Rules.
This transitional approach mitigates disruption while facilitating a gradual migration to the unified framework.
Implications for Employers and Professionals
From a legal and commercial perspective, the Rules present several noteworthy implications:
- Simplification and legal certainty: Employers benefit from a single, coherent legislative framework governing preferential tax treatment for highly skilled employees.
- Enhanced competitiveness: The 15% flat tax rate remains competitive at an international level, particularly when combined with Malta’s broader regulatory and lifestyle advantages.
- Long-term talent planning: The potential duration of up to 15 years under the regime supports longer-term workforce and relocation strategies.
To Sum Up
The Tax Treatment of Highly Skilled Individuals Rules, 2026, represent a substantive reform of Malta’s tax incentive architecture. By consolidating multiple regimes into a single legislative framework with clearly defined conditions and safeguards, Malta has strengthened its legal infrastructure for attracting international senior talent while preserving regulatory oversight and fiscal integrity.
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