The Malta Highly Qualified Persons Rules build on the success of Malta’s trackrecord in attracting highly qualified professionals seeking highly-paid positions in a warm Mediterranean Island in the European Union. After joining the EU, Malta has experienced an expansion in the financial, gaming and aviation services which has created the need for additional highly qualified professionals. Malta's membership and full implementation of the Schengen Area Treaty offers further attraction on the basis of the ease of travel within the Schengen Area enjoyed by highly qualified persons in Malta. It also offers special tax status by setting a flat personal tax rate on employment income generated in Malta at 15%.
Legal Basis for Malta's Highly Qualified Persons Rules
The Highly Qualified Persons scheme introduced by virtue of L.N. 106 of 2011 is a scheme aimed at attracting highly qualified professionals in sectors such as financial services, gaming and aviation to work with companies who are licensed and recognised by the Malta Financial Services Authority, the Malta Gaming Authority and companies holding an Air Operators Certificate or an Aerodrome Licence issued by Transport Malta. This scheme introduces a special tax status for highly qualified individuals who occupy an eligible office in the financial, gaming and aviation sectors.
Sectors Eligible for HQP Tax Status
Highly Qualified Persons eligible for HQP tax status under this scheme must take up eligible senior positions or executive jobs in the following eligible industries:
- Financial services - companies who are licensed and recognised by the Malta Financial Services Authority.
- Online Gaming - companies who are licensed and recognised by the the Malta Gaming Authority.
- Aviation- companies holding an Air Operators Certificate or an Aerodrome Licence issued by Transport Malta.
Eligible Salary Levels for HQP Special Tax Status
An individual is eligible to apply for a special tax status under this scheme if he satisfies the following conditions:
- Income received by the professional amounts to at least €75,000 adjusted annually in line with the Retail Price Index. The minimum income (based on the Retail Price Index published by the Malta National Statistics Office) must exceed the following thresholds:
- €75,000 for basis year 2010
- €76,136 for basis year 2011
- €78,207 for basis year 2012
- €80,100 for basis year 2013
- €81,205 for basis year 2014
- €81,457 for basis year 2015
- €82,353 for basis year 2016
- €82,881 for basis year 2017
- €84,016 for basis year 2018
- €84,991 for basis year 2019
- €86,385 for basis year 2020
- €86,938 for basis year 2021
- €88,242 for basis year 2022
- €93,669 for basis year 2023
- €98,436 for basis year 2024
- Employment with a company which falls under the definition of ‘eligible office’.
- Professional must show that he has the necessary qualifications and at least 5 years of experience.
- Professional must not be domiciled in Malta.
- Professional does not benefit under any other special tax scheme in Malta.
- Professional must be deemed to be a fit and proper person.
- Professional must be in possession of a health insurance policy covering himself and his dependents.
Positions eligible for Highly Qualified Persons Rules
Senior positions which are eligible under this scheme include the following professions:
- Actuarial Professional
- Aviation Continuing Airworthiness Manager
- Aviation Flight Operations Manager
- Aviation Ground Operations Manager
- Aviation Training Manager
- Chief Executive Officer
- Chief Financial Officer
- Chief Commercial Officer
- Chief Insurance Technical Officer
- Chief Investment Officer
- Chief Operations Officer (including Aviation Accountable Manager)
- Chief Risk Officer (including Fraud and Investigations Officer)
- Chief Technology Officer
- Chief Underwriting Officer
- Head of Investor Relations
- Head of Marketing (including Head of Distribution Channels)
- Head of Research and Development; (including Search Engine Optimisation and Systems Architecture)
- Portfolio Manager
- Senior Analyst (including Structuring Professional)
- Senior Trader/Trader
- Odds Compiler Specialist
- Individual income derived from employment in an 'eligible office' will not qualify for the scheme if a claim is made for any relief, deduction, reduction, credit or set-off of any kind except for any income tax deducted at source.
HQP Taxation of Senior Company Executives
Highly qualified executives who register and qualify under this scheme benefit from a flat rate of personal tax of 15% on all income derived from their qualifying employment in Malta. This 15% flat rate applies up to a maximum of €5,000,000, and any income over €5m is not subject to any Maltese tax.
The Malta tax benefits under this scheme apply to EEA and Swiss nationals for a maximum consecutive period of 5 years preceding the first year of assessment and to third country nationals for a maximum consecutive period of 4 years. EEA/Swiss nationals who avail themselves of this tax benefit shall be eligible upon application, for a one-time extension of 5 years, making the qualifying period, a maximum of 10 years of assessment.
Our Personal Tax Practice
Led by Dr Jean-Philippe Chetcuti, Dr Priscilla Mifsud Parker, and Magdalena Velkovska, our Malta personal tax lawyers have extensive experience advising private clients, high net worth individuals, senior corporate executives, investors and entrepreneurs on personal tax matters. Contact us for more information about the Malta Highligh Qualified Persons rules and how HQP special tax status may apply to you.
