On 7 April 2026, the Malta Tax & Customs Administration (MTCA) published official guidelines on the Tax Treatment of Highly Skilled Individuals Rules (these guidelines are issued in terms of Article 96(2) of the Income Tax Act (Chapter 123 of the Laws of Malta) and are to be read in conjunction with Legal Notice 20 of 2026) providing practical clarity on the harmonised 15% flat tax regime concerning the Tax Treatment of Highly Skilled Individuals Rules.
Scope of Qualifying Economic Activities
The guidelines confirm that Malta Enterprise issues eligibility determinations for employing entities engaged in the following activities (where the entity is not regulated by another competent authority, such as the MFSA, MGA, Transport Malta, or the Office of the Chief Medical Officer):
– Manufacturing.
– Software development.
– Industrial services related to manufacturing, health, biotechnology, pharmaceuticals, and life sciences.
– and other innovative economic activities as determined by Malta Enterprise.
This clarifies the scope for certain innovation-driven sectors.
Eligible Roles and Functions
The guidelines detail the expected functions and responsibilities for senior and specialist positions. Eligible roles typically require a high level of strategic, managerial, technical, or regulatory responsibility. This clarification helps employers and applicants objectively assess whether a specific position qualifies under the Rules.
The revised framework appears to provide greater flexibility in relation to ownership structures, with indications that previous limitations on shareholding may have been relaxed. However, this aspect is not expressly clarified in the published guidelines and should therefore be understood as deriving from the broader legislative changes rather than explicit administrative guidance. Applicants should assess their position carefully in light of the Rules and, where necessary, seek confirmation from the relevant competent authority.
Income Thresholds and Tax Application
The 15% flat tax applies to qualifying employment income from an eligible office, generally between a minimum threshold of €65,000 (exclusive of fringe benefits) and €7 million per year. Income above €7 million is taxed at standard progressive rates. The minimum threshold will increase by €10,000 every five years.
The benefit must be claimed annually and applies only to employment income.
Duration and Renewals
– Initial benefit period: 5 years.
– Possible extensions: Up to two additional 5-year periods (maximum 15 years total).
– All benefits end no later than 31 December 2040.
Renewal and Compliance Requirements
The guidelines set clearer administrative rules:
– Beneficiaries must satisfy all conditions every year, including minimum salary, performance of an eligible role, and continued employment with a qualifying entity.
– Late renewal applications attract penalties, and timely submission is essential.
– The option for the 15% rate must be exercised annually.
Application Process
Applications are submitted to the relevant competent authority (Malta Enterprise, MFSA, MGA, Transport Malta, or Office of the Chief Medical Officer, depending on the sector). Formal determination from the competent authority is required before the tax benefit can be claimed. Applications are handled through the relevant competent authority.
How Can We Help?
As Authorised Mandatories (ARM00905), our experienced tax team is dedicated to supporting both employers and individuals in evaluating their eligibility under this new tax incentive regime and facilitating the successful approval of each qualifying individual by the relevant competent authority.
Contact us today to schedule a consultation on residence planning. This will allow us to comprehensively assess your circumstances and initiate the application process effectively.
