Individuals Tax Rates in Malta
Tax rates for resident single persons for chargeable income for 2012
|Taxable Income (€)||Tax Rate||Deduct (€)|
|0 – 8,500||0%||0|
|8,501 – 14,500||15%||1,275|
|14,501 – 19,500||25%||2,725|
Tax rates for resident married couples for chargeable income for 2012
|Taxable Income (€)||Tax Rate||Deduct (€)|
|0 – 11,900||0%||0|
|11,901 – 21,200||15%||1,785|
|21,201 – 28,700||25%||3,905|
Provided that married couples may, at their discretion opt to be taxed separately by applying single rates of income rather than aggregate their income in a joint computation.
Income Tax Benefits for Professionals
The Highly Qualified Persons Rules 2011 (“the Rules”) enacted by means of Legal Notice 106 of 2011 in March 2011 but with retrospective effect as of 1 January 2011, prescribe a preferential income tax bracket to a number of highly qualified professionals. The intention of the legislator is to further incentivise foreign direct investment in Malta on a personal and not just on a corporate level, with a personal income tax of just 15% by way of derogation from the statutory individual tax brackets. Any income in excess of EUR 5,000,000 per annum shall not be subject to any further tax in Malta.
Eligible employments and offices are set forth in the Schedule to the Rules and pertain to the Financial Services and Insurance industry, and solely to companies which are licensed, authorised or recognised by the Malta Financial Services Authority, to conduct the business of financial business in and from Malta under Article 12 of the Financial Institutions Act. Eligible offices include the following:-
- Chief Executive Officer;
- Chief Risk Officer;
- Chief Financial Officer;
- Chief Technology Officer;
- Portfolio Managers;
- Chief Investment Officer;
- Senior Traders;
- Senior Analysts;
- Actuarial Professionals;
- Chief Underwriting Officers;
- Head of marketing;
- Head of Investor Relations
In order to be eligible, the individual must meet all the following conditions set forth in the Rules:
- Have a qualifying contract of employment in excess of EUR 75,000 (exclusive of any fringe benefits) received in respect of work and duties carried out in Malta, or in respect of any period spent ouside Malta in connection with such work or duties;
- Be offered protection as an employee under Maltese Law irrespective of the legal relationship for the exercising of his work or duty – (consultancy services are excluded);
- Be employed in a senior position;
- Is in possession of professional qualifications (at least five years professional experience);
- Fully discloses and declares emoluments received in respect of income from a qualifying contract of employment in Malta;
- Can sufficiently maintain himself/herself and members of immediate family, without recourse to social assistance in Malta;
- Resides in adequate residence in Malta (both for himself/herself and her immediate family without recourse to local social assistance);
- In possession of valid travel documents;
- In possession of health insurance for himself / herself and immediate family;
- Is not domiciled in Malta.
Eligible individuals must submit a written declaration to the MFSA, which when endorsed has to be submited to the Maltese Commissioner of Inland Revenue, together with the applicant’s income tax return. Applicants shall be required to disclose all such information and documents as the Commissioner of Inland Revenue may require to attest the veracity of the claim. Any individual who has been employed for a period of at least two (2) years preceding the 1 January 2011, for the performance of his duties in Malta shall not be eligible under the scheme.
The eligibility date for the applicability of the scheme shall vary in the case of EEA, Swiss and third country nationals. EEA and Swiss nationals shall be entitled to benefit from the scheme for a maximum period of five (5) year as from year of first year of assessment in Malta. The applicable rate for non-nationals is four (4) years. If the applicants were employed for the performance of duties in Malta for up to two (2) years prior to 1 January 2011, then the aforesaid eligible period shall be reduced accordingly.
The aforesaid benefits shall be deemed to have been withdrawn with retrospective effect if a beneficiary is a third-country national (non-EU/EEA/Swiss) who:-
- physically stays in Malta, in the aggregate for more than 1,460 days (4 calendar years);
- acquries real estate rights over immovable property in Malta (directly through the acquisition of immovable property in Malta and/or equity in corporte entities which hold immovable property rights in Malta).