Malta Highly Skilled Individuals Rules
Malta has introduced rules providing a single framework of fiscal incentives to persons with top expertise and skills in the financial services, remote gaming, aviation, oil and gas services, healthcare, maritime and shipping and the science, technology, engineering and mathematics (STEM) sectors. In addition to the benefits of living and working in Malta, persons qualifying under these rules benefit from a favourable flat tax rate of 15% on income earned from qualifying contracts of employment.
The new rules replace a number of existing rules, and persons benefitting under any existing rules should transition to the new rules by 31 December 2028.
It is income earned from a “qualifying contract of employment” that benefits from the favourable 15% tax rate. The employment activity contemplated in a qualifying contract of employment has to be activity in relation to an “eligible office”.
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.
Period of benefit. The 15% favourable rate applies for a period of 5 consecutive years (from the year in relation to which a formal declaration was issued and may be renewable for further two 5-year periods (i.e. a maximum of 15 years). No determination will be issued after 31 December 2036 and all benefits will be terminated on 31 December 2040 at the latest.
The competent authority must issue a formal determination relating to anything that needs to be proven to its satisfaction, and no benefit arises unless the relevant determination is so issued.
The Beneficiary earning the income must be an individual who meets all the following criteria:
He or she is an individual who derives income subject to tax in Malta as income from employment or office, that is payable under a qualifying contract of employment 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 carried out in Malta) or on leave during the carrying out of such work or duties.
He or she is protected and paid as an employee under Maltese law (irrespective of the legal relationship with the employer) for the purpose of exercising genuine and effective work for (or under the direction of) someone else.
He or she has required adequate and specific competence proven to the satisfaction of the competent authority.
He or she proves to the satisfaction of the competent authority that he or she is in possession of adequate professional qualifications.
He or she has not benefitted from the special income tax provisions relevant to Investment Services and Insurance Expatriates.
He or she fully discloses and declares for tax purposes all emoluments received in respect of income from a qualifying contract of employment and all income received from a person related to his or her employer paying out income from a qualifying contract as chargeable to tax in Malta.
He or she proves to the satisfaction of the competent authority that he or she performs the activities of an eligible office.
He or she proves to the satisfaction of the competent authority that he or she resides in accommodation regarded as normal for a comparable family in Malta and which meets the general health and safety standards in force in Malta.
He or she proves to the satisfaction of the competent authority that he or she is in possession of a valid travel document (i.e. ID card or passport)
He or she proves to the satisfaction of the competent authority that he or she is in possession of private medical insurance in respect of all risks normally covered for Maltese nationals for himself or herself and the members of his or her family.
He or she proves to the satisfaction of the competent authority that he or she is not domiciled in Malta.
An “eligible office” is an employment or office listed in the schedule to the relevant rules and include employment with companies licensed and/or recognised by the various “competent authorities” in the rules, namely the Malta Financial Services Authority, the Malta Gaming Authority, the Authority for Transport in Malta, the Office of the Chief Medical Officer to the Government and Malta Enterprise.
Eligible offices include the following:
Chief Executive Office
Chief and/or Head of Risk Officer (including Fraud and Investigations Officer)
Chief Financial Officer
Chief Operations Officer
Chief Technology/Digital Officer
Chief Information Officer
Chief Customer Experience Officer
Chief Commercial Officer
Chief and/or Head Compliance and AML Officer
Head of Marketing
A number of other offices qualify, specific to the roles regulated, licensed or recognised by the different competent authorities.
Minimum amount chargeable to tax
The minimum amount of income chargeable to tax at the 15% rate shall be €65,000 (increased by €10,000 every five years with the first increase in 2031). The tax due cannot be reduced by tax credits, deductions or reliefs. It is important that income is correctly declared in the beneficiary’s tax return and that such returns are filed by the relevant tax return dates for the benefit to apply.
The maximum amount of income that can benefit from the 15% rate is €7,000,000.
In line with general income tax rules in Malta, any person who is resident but not domiciled in Malta is charged to tax in Malta only on income and capital gains arising in Malta and income arising outside Malta which is received in Malta. This means that income arising outside Malta which is not received in Malta is not charged to tax in Malta and that capital gains arising outside Malta is not charged to tax in Malta even if it is received in Malta.
Malta Licencing Authority
The Malta Financial Services Authority (MFSA) recognises and licences companies, including financial institutions, insurance companies, intermediaries, investment services licence holders, funds, and pension schemes.
The Malta Gaming Authority (MGA) regulates and licenses companies within the remote gaming, casino gaming and sports betting industry.
Are You Considering Applying For The Highly Skilled Individual Rules In Malta?
Papilio Services can help! As accredited agents through Identity Malta, we will assist you with the Commissioner of Inland Revenue and obtaining signed declarations from the Malta Financial Services Authority or the Malta Gaming Authority. Moreover, we will assist you in filing your income tax return form correctly.
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