Malta: Highly Qualified Persons Rules

The Malta Highly Qualified Persons Rules  builds on the success of Malta's reputation in attracting highly professional expatriates seeking an alternative residence base in a warm Mediterranean Island in the European Union. After joining the EU, Malta has experienced an expansion in the financial, gaming and aviation services which has created the need for additional highly qualified workers. Malta's membership and full implementation of the Schengen Area Treaty offers further attraction on the basis of the ease of travel within the Schengen Area enjoyed by highly qualified persons in Malta. It also offers special tax status by setting the personal tax rate on employment income generated in Malta at 15%.

Highly Qualified Persons Rules - Legal Basis

The Highly Qualified Persons scheme introduced by virtue of L.N. 106 of 2011 is a scheme aimed at attracting highly qualified professionals in sectors such as financial services, gaming and aviation to work with companies who are licensed and recognised by the Malta Financial Services Authority, the Malta Gaming Authority and companies holding an Air Operators Certificate or an Aerodrome Licence issued by Transport Malta. This scheme introduces a special tax status for highly qualified individuals who occupy an eligible office in the financial, gaming and aviation sectors. 

Highly Qualified Persons Rules - Eligibility

An individual is eligible to apply for a special tax status under this scheme if he satisfies the following conditions:

• Income received by the professional amounts to at least €75,000 adjusted annually in line with the Retail Price Index. The minimum income (based on the Retail Price Index published by the Malta National Statistics Office) must exceed the following thresholds:
  • €75,000 for basis year 2010
  • €76,136 for basis year 2011
  • €78,207 for basis year 2012
  • €80,100 for basis year 2013
  • €81,205 for basis year 2014
  • €81,457 for basis year 2015
  • €82,353 for basis year 2016
  • €82,881 for basis year 2017
  • €84,016 for basis year 2018
  • €84,991 for basis year 2019
  • €86,385 for basis year 2020 
  • €86,938 for basis year 2021
• Employment with a company which falls under the definition of 'eligible office'.
• Professional must show that he has the necessary qualifications and at least 5 years of experience.
• Professional must not be domiciled in Malta.
• Professional does not benefit under any other special tax scheme in Malta.
• Professional must be deemed to be a fit and proper person.
• Professional must be in possession of a health insurance policy covering himself and his dependents.

Highly Qualified Persons Rules - '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
• 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.

Taxation of Highly Qualified Persons

Individuals who register under this scheme benefit from a favourable tax rate of 15% on all income derived from their employment in Malta. This 15% flat rate is imposed up to a maximum of €5,000,000, and any excess of this amount is not subject to tax. 

The tax benefits under this scheme apply to EEA and Swiss nationals for a maximum consecutive period of 5 years preceding the first year of assessment and to third country nationals for a maximum consecutive period of 4 years. EEA/Swiss nationals who avail themselves of this tax benefit shall be eligible upon application, for a one-time extension of 5 years, making the qualifying period, a maximum of 10 years of assessment.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.