The highly qualified personal tax rules

Highly qualified personal tax rules

The highly qualified personal tax rules

After joining the EU, Malta experienced a growth in the financial, gaming and aviation services which has created the need for additional highly qualified workers. Following this expansion, the Malta Highly Qualified Persons Rules, introduced by Legal Notice 106 of 2011, came into effect on 1st January 2010 which is aimed to attract highly professional expatriates seeking an alternative residence base within the Europe Union. Our team of experienced tax advisors at GCS Malta have compiled all the necessary details in the following article.

This scheme introduces a special tax status for highly qualified individuals who occupy an eligible office with companies licensed by the Malta Financial Services Authority, Malta Gaming Authority and the Authority for Transport in Malta. Such professionals may opt to be subject to a tax of the income from the eligible office under a qualifying contract of employment at a flat rate of 15%. In order to be eligible for such a benefit, individuals need to have the following general requirements.

General requirements

  • The received income amounts to at least €75,000 adjusted annually in line with the Retail Price Index. The minimum income must exceed the following thresholds:

€75,000 for the basic year 2010

€76,136 for the basis year 2011

€78,207 for the basis year 2012

€80,100 for the basis year 2013

€81,205 for the basis year 2014

€81,457 for the basis year 2015

€82,353 for the basis year 2016

€82,881 for the basis year 2017

€84,016 for the basis year 2018

€84,991 for the basis year 2019

  • Beneficiary not domiciled in Malta.
  • Derives employment income from activities carried on in Malta.
  • Has stable and regular resources that are enough to maintain himself/herself and his/her dependants without resources to the social assistance system in Malta.
  • Be in possession of valid travel documents.
  • Be in possession of health insurance in respect of all risks covered for Maltese Nationals.
  • Is protected as an employee under Maltese Law.
  • Is in possession of professional qualifications or has at least five years of professional experience.
  • Resides in accommodation regarded as normal for a comparable family in Malta.
  • Proves to the satisfaction of the competent authority that he/she performs the duties of an eligible office.
  • Does not benefit from any of the deductions and incentives available to investment services expatriates.

Eligible offices

Senior positions which are eligible under this scheme include the following professions:

•    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; (including Search Engine Optimisation and Systems Architecture)

•    Portfolio Manager

•    Senior Analyst (including Structuring Professional)

•    Senior Trader/Trader

•    Odds Compiler Specialist

•    Embryologist

•    Responsible Person

•    Lead Quality Manager

Tax Considerations

This scheme will be subject to an annual flat rate of 15% on employment income derived in Malta.

The reduced tax rate does not allow the possibility to claim any relief, deduction, reduction or credit of any kind.

Other income chargeable to tax in Malta will be taxable at the standard progressive rates of the individuals.

No further tax will be chargeable on include from a qualifying contract of employment in excess of €5,000,000.

Period of eligibility

EU, EEA and Swiss Nationals Third Country Nationals
5 Consecutive Years    4 Consecutive Years
One-time extensions of 5 years may be applied    One-time extension of 4 years may be applied
Maximum period of 10 years    Maximum period of 8 years

As qualified tax advisors, GCS Malta can assist you with any tax-related needs you may inquire during your journey. Get in touch with us now by sending an email to [email protected], where one of our tax advisors will be more than happy to help you.

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