Expatriates working in Malta
Foreign professionals who take up employment in Malta in target sectors instead of tax rates of up to 35 per cent, tax will be limited to 15 per cent on their salary. This option is available to qualified persons who occupy eligible offices with companies licensed or recognized by the Malta Financial Services Authority (MFSA) such as banks, fund managers and insurance companies as well as companies operating internet gaming and lottery services that are licenced by the Malta Lotteries and Gaming Authority (LGA).
Income from work outside of Malta is tax-free as long as not remitted into Malta. Overseas capital gains are tax-free, even if remitted.
Qualifying Contract of Employment
An individual may benefit from the 15% tax rate if the person satisfies all of the following employment conditions:
derives employment income subject to income tax in Malta;
employment contract is subject to the laws of Malta and proves to the satisfaction of the Malta Financial Services Authority that the contract is drawn up for exercising genuine and effective work in Malta;
proves to the satisfaction of the Malta Financial Services 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 Malta Financial Services Authority that the activities performed are those of an eligible office; and,
proves that: they are in receipt of stable and regular resources which are sufficient to maintain themselves and the members of their family without recourse to the social assistance system in Malta;
the applicant 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;
The applicant in possession of a valid travel document; and,
The applicant is in possession of sickness insurance in respect of all risks normally covered for Maltese nationals for themselves and the members of their family.
The applicant has an annual income of at least €75,000 (excluding the annual value of any fringe benefits and discretionary bonuses).
Application to Benefit from the Scheme
An application for a formal determination relating to eligibility under the Highly Qualified Persons Rules must be made to the Chairman, Malta Financial Services Authority on the appropriate form, found on the tax authority website.
The benefit is exercised for each year of assessment by means of a declaration made on the RA17 form signed by the beneficiary and endorsed by the Malta Financial Services Authority. This form is to be attached to the income tax return and filed with the Inland Revenue Department by the tax return date.