Amendments to the Highly Qualified Persons Rules

By means of Legal Notice 7 of 2017, the rules applicable to the taxation of employment income derived by certain Highly Qualified Persons as defined were amended. By virtue of such rules, certain highly qualified persons employed in the financial services sector and in the gaming and aviation sectors will at the option of the […]

Written By ACT Team

On January 11, 2017
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By means of Legal Notice 7 of 2017, the rules applicable to the taxation of employment income derived by certain Highly Qualified Persons as defined were amended.

By virtue of such rules, certain highly qualified persons employed in the financial services sector and in the gaming and aviation sectors will at the option of the beneficiary, be subject to tax in Malta at a flat rate of 15% on their employment income derived from certain eligible employments and offices subject to the satisfaction of certain conditions.  The list of eligible employments and offices can be found in the Schedule to the rules. 

The option is available for a consecutive period of 5 years for EEA and Swiss nationals (4 years for third-country nationals) commencing from the year in which the individual is the first subject to tax in Malta.   The rules also provide for the possibility of a one-time extension of 5 years to the qualifying period.  Before the amendment, the extension was only possible with respect to individuals who would have already availed themselves of the said benefit.  By virtue of this amendment, the extension will also become possible for all highly qualified persons irrespective of whether or not they would have availed themselves of the said benefit. 

The maximum qualifying period cannot exceed a consecutive period of 10 years commencing from the year preceding the first year of assessment in which the individual is first liable to tax in Malta.  Before the amendment, the maximum qualifying period could not exceed ten years of assessment. 

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected].