Why choose Malta?
Since joining the European Union in 2004, Malta has been modernising its economy and is becoming recognized as a highly functional, low cost, well regulated jurisdiction with the underlying theme being availability of trained staff through investment in education and training. However, the expansion of the financial services and the gaming services since joining the EU and the aviation services in recent years, is showing a significant need for additional highly qualified workers. Therefore, the need is being felt for the importation of knowledge particularly in those areas of the financial services sector, the gaming sector and the aviation sector where local expertise is lacking.
Who can qualify
The objective of this Programme is to attract highly qualified persons to occupy “eligible office” with companies licensed and/or recognized by the Malta Financial Services Authority, companies licensed by the Malta Gaming Authority and companies holding an Air Operators’ Certificate issued by the Authority for Transport in Malta.
Eligible office” comprises employment in one of the following positions:
- Actuarial Professional
- Aviation Continuing Airworthiness Manager
- Aviation Flight Operations Manager
- Aviation Ground Operations Manager
- Aviation Training Manager
- Chief Executive Officer
- Chief Financial Officer
- Chief Commercial Officer
- Chief Insurance Technical Officer
- Chief Investment Officer
- Chief Operations Officer (including Aviation Accountable Manager)
- Chief Risk Officer (including Fraud and Investigations Officer)
- Chief Technology Officer
- Chief Underwriting Officer
- Head of Investor Relations
- Head of Marketing (including Head of Distribution Channels)
- Head of Research and Development;
- Portfolio Manager
- Senior Analyst (including Structuring Professional)
- Senior Trader/Trader
- Odds Compiler Specialist
- Employment Income
Individual income from a qualifying contract of employment in an “eligible office” with a company licensed and/or recognized by the Malta Financial Services Authority is subject to tax at a flat rate of 15% provided that the income amounts to at least €82,881 adjusted annually in line with the Retail Price Index. The 15% flat rate is imposed up to a maximum income of €5,000,000 (five million euro), the excess is exempt from tax.
The 15% tax rate applies for a consecutive period of five years for European Economic Area and Swiss nationals and for a consecutive period of four years for third country nationals.
The four or five-year period, as the case may be, commences from the year when the individual concerned first becomes taxable in Malta. In cases where the individual was taxable in Malta but not benefiting under this Scheme and subsequently comes to Malta and becomes eligible under the Scheme, he can benefit only if the four or five-year period has not elapsed; the benefit is for the years remaining from the date of eligibility under the Scheme until the said four or five year period from the date of first being subject to tax in Malta elapses.
Nationals of the EEA and Switzerland who have availed themselves of the benefit under this scheme may apply for a one-time extension of five years to the qualifying period. Third country nationals of who have availed themselves of the benefit under this scheme may apply for a one-time extension of four years to the qualifying period.
- Qualifying Contract of Employment
An individual may benefit from the 15% tax rate if he satisfies all of the following employment conditions:
- Derives employment income subject to income tax in Malta
- Has an employment contract subject to the laws of Malta and proves to the satisfaction of the Competent Authority that the contract is drawn up for exercising genuine and effective work in Malta;
- Proves to the satisfaction of the Competent Authority that he is in possession of professional qualifications and has at least five years professional experience;
- Has not benefitted from deductions available to investment services expatriates with respect to relocation costs and other deductions (under article 6 of the Income Tax Act);
- Fully discloses for tax purposes and declares emoluments received in respect of income from a qualifying contract of employment and all income received from a person related to his employer paying out income from a qualifying contract as chargeable to tax in Malta;
- Proves to the satisfaction of the Competent Authority that he performs activities of an eligible office; and
- Proves that:
- he is in receipt of stable and regular resources which are sufficient to maintain himself and the members of his family without recourse to the social assistance system in Malta;
- he 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
8.he is in possession of a valid travel document;
9.he is in possession of sickness insurance in respect of all risks normally covered for Maltese nationals for himself and the members of his family.
- Exclusions from the Scheme:
The individual income derived from employment in an “eligible office” will not qualify for the 15% reduced rate if:
- It is paid by an employer who receives any benefits under business incentive laws;
- is paid by a person who is related to the employer who received any benefits under any business incentive laws;
- if the individual holds more than 25% (directly or indirectly) of the company licensed and/or recognized by the Malta Financial Services Authority or the Malta Gaming Authority or of a company holding an Air Operators’ Certificate issued by the Authority for Transport in Malta;
- if the individual is already in employment in Malta before the coming into force of the scheme either with a company not licensed and/or recognized by the Malta Financial Services Authority or the Malta Gaming Authority or not holding an Air Operators’ Certificate issued by the Authority for Transport in Malta
The individual income derived from employment in an “eligible office” will not qualify for the scheme if a claim is made for any relief, deduction, reduction, credit or set-off of any kind except for any income tax deducted at source. Any individual who claims a benefit under the scheme when he is not entitled to do so is liable to a penalty equal to the amount of benefit claimed and if the benefit is paid the individual is liable to repay the benefit received plus additional tax of 7% per month or part thereof.
Applications for a special tax status may only be submitted to the Commissioner by an Authorised Registered Mandatory. E&S Consultancy can assist you in the completion of the relevant Application Form, the collection of all necessary supporting documentation and the submission of same to the applicable Authority.