Enterprises require the availability of human resources and such resources may be developed through education and training. Such resources would need to be substantiated through knowledge and experience. This measure facilitates the employment of non-resident individuals in roles which are currently not addressed by the local labour market by temporarily reducing the tax burden on such individuals.
Duration of the incentive
This scheme will remain ongoing until 31st December 2017.
This measure is available to individuals, who are employed in an “eligible office” as defined below. Such individuals may request Malta Enterprise to determine their eligibility to benefit from a reduced flat income tax rate of 15% on their employment income derived from an eligible office.
An Eligible Office shall cover employment in a role directly engaged in:
- Industrial Research and Experimental Development insofar that the applicant is in possession of a post graduate degree in sciences or engineering that is applicable to the role.
- Product development and product or process innovation insofar that the applicant is either in possession of post graduate degrees in sciences, engineering, design, creativity, product development, or art and that is applicable to the role or has demonstrated a minimum of (3) years’ experience as part of a team engaged in a similar role.
- An Eligible Office shall also include Senior Management roles in so far that the person’s responsibility within the firm is directly related to creativity and innovation tasks described by (a) and (b) above. A Senior Management role entails that the applicant reports directly to the Board of Directors as should be specified in the contract of employment.
The benefit may only be claimed after a formal determination of eligibility is issued by Malta Enterprise and as long as all the following parameters are respected:
- The 15% tax rate shall apply for a consecutive period of not more than three (3) years, commencing from the year preceding the year of assessment in which that person is first liable to pay tax. Malta Enterprise will extend the option by one (1) year for eligible persons whose employment commences on or between 1st September and 31st December of any year.
- The benefit may not be claimed in respect to income received in any year preceding the determination by Malta Enterprise.
An individual may benefit from the 15% tax rate if he/she satisfies all of the following employment conditions:
- Derives employment income of a minimum of forty-five thousand euro (€45,000) and subject to paying income tax on such income in Malta;
- Has an employment contract subject to the laws of Malta and proves to the satisfaction of Malta Enterprise that the contract is drawn up for exercising genuine and effective work in Malta;
- Must be in a possession of qualifications issued by an educational establishment attesting the successful completion at post-graduate level and as recognised by the Malta Qualification Recognition Information Centre that is relevant to the eligible office;
- Has a minimum experience of three (3) years in a role comparable to that of the eligible office;
- Has not benefitted from deductions available to investment services expatriates with respect to relocation costs and other deductions (in terms of Article 6 of the Income Tax Act);
- Fully discloses his/her income for Maltese income tax purposes, declares all emoluments received in respect of income from a qualifying contract of employment together with all income received from a person related to his/her employer;
- Proves to the satisfaction of Malta Enterprise that the tasks and activities performed are of an eligible office;
- Proves that is in receipt of stable and regular resources which are sufficient to maintain oneself and the family members without resource to the social assistance system in Malta;
- 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;
- In possession of a valid travel document;
- Not domiciled in Malta;
- In possession of sickness insurance in respect of all risks normally covered for Maltese nationals for himself and the members of his family;
- In respect of any employment commencing from 1st January 2016 the applicant shall be required to present evidence of the recruitment process. This shall entail the presentation of documentation showing how the call was advertised; and
- An individual may only benefit from the 15% tax rate if he/she does not control more than 25% of the shares of the undertaking in which he / she is employed with.