Malta Financial Services Authority New Rules

The objective of a recently introduced scheme is to attract highly qualified persons to occupy 'eligible office' with companies licensed and/or recognized by the Malta Financial Services Authority. The rules for the scheme came into force with effect from 1 January 2010 and apply to income which is brought to charge in year of assessment 2011 (basis year 2010) for individuals not domiciled in Malta.

Employment Income
Individual income from a qualifying contract of employment in an 'eligible office' with a company licensed and/or recognised by the Malta Financial Services Authority is subject to tax at a flat rate of 15% provided that the income amounts to at least â¬75,000 (seventy five thousand euro) adjusted annually in line with the Retail Price Index. The 15% flat rate is imposed up to a maximum income of â¬5,000,000 (five million euro), the excess is exempt from tax.
The 15% tax rate applies for a consecutive period of five years for European Economic Area (ie EU countries plus Norway, Iceland and Liechtenstein) and Swiss nationals and for a consecutive period of four years for third country nationals. Individuals who already have a qualifying contract of employment in an 'eligible office' two years before the entry into force of the scheme may benefit from the 15% tax rate for the remaining years of the scheme. This means that a national of the EEA and Switzerland who has a qualifying contract of employment in an 'eligible office' starting in 2008 (basis year) will benefit for three years from the scheme, ie basis years 2010, 2011 and 2012, while a third country national will benefit from one less.

Qualifying Contract of Employment
An individual may benefit from the 15% tax rate if he satisfies all of the following employment conditions:
1. derives employment income subject to income tax in Malta;
2. 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;

There are specific requirements and exclusions which will be looked in detail at our office to ensure that a prospective applicant qualifies for the above scheme

Please contact us directly at [email protected] to discuss any requirements.