The Maltese tax regime under Article 6 of the Income Tax Act (ITA) is tailored to attract highly qualified expatriate professionals into the investment services and insurance sectors. By offering generous tax exemptions for qualifying individuals, Malta aims to bolster its position as a global financial services hub.
Who Qualifies for the benefits?
Investment Services Expatriate: An individual employed by, or providing services to,
- a company holding an investment services licence under the Investment Services Act; or
- a company recognised by the relevant competent authority under the Act whose activities are strictly limited to management, administration, safekeeping or investment advice to collective investment schemes.
Insurance Expatriate: An individual employed by, or providing services to,
- a company authorised under Article 7 of the Insurance Business Act; or
- an insurance manager as defined by the Insurance Distribution Act; or
- a company carrying on insurance broking business under that Act.
Residence/Domicile test: To benefit from Article 6, the expatriate must either:
- Not be ordinarily resident and not domiciled in Malta; or
- Have been non-resident in Malta for at least three years immediately prior to starting employment with the qualifying company, during which the individual was engaged full-time in a comparable role outside Malta.
Exclusion: Individuals benefiting under Article 6 may not simultaneously avail themselves of the special flat-rate “Highly Qualified Persons” rules (15% rate) under S.L. 123.126. Deloitte+1
Tax Benefits Under Article 6
1. Exemption from tax on personal expenses
A qualifying expatriate may opt to claim an exemption from income tax (via fringe benefit rules) for employer-paid personal expenses and family-related costs, including:
- relocation/removal costs to or from Malta;
- accommodation expenses incurred in Malta;
- travel costs for the expatriate and immediate family visits to/from Malta;
- provision of a car in Malta;
- a monthly subvention (living allowance) of up to €600 per calendar month;
- medical expenses and medical insurance for the expatriate and immediate family;
- school fees for the expatriate’s children.
This exemption may be claimed for a period of up to ten years starting from the first year the expatriate is liable to Maltese tax.
2. Treated as non-resident for certain passive income/capital gains
Under Article 6, the qualifying expatriate is treated as non-resident for purposes of Article 12(1)(c) ITA, meaning the following types of income are exempt from Maltese tax:
- interest, discount, premium or royalties;
- gains or profits from transfers of, or rights over:
- units in a collective investment scheme as defined in the ISA;
- units relating to linked long-term insurance business;
- interests in partnerships which are not property partnerships;
- shares or securities in companies which are not “property companies”.
These benefits continue for the duration of employment by the qualifying company under Article 6.
For expatriates in the investment services or insurance sectors, Malta’s Article 6 regime offers a compelling tax-efficient structure — combining exemptions on certain employer-paid personal costs with non-residence treatment for passive income/capital gains. Provided the qualifying conditions (employment in a licensed company, residence/domicile test) are met, the scheme can be leveraged for up to ten years. As always, specific circumstances vary, and professional tax advice is recommended to ensure full compliance and optimal benefit.
Disclaimer
The above does not constitute tax or legal advice and is up to date on the date it was published. Please ensure that you take appropriate advice from tax or legal professionals before making any decisions based on the above.
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