- Special Tax Rate
- October 11, 2013
- Law Firm: CSB Advocates - Swatar Office
It was reported in the past weeks that a “total of 320 professionals who have taken up residence in Malta are benefiting from a maximum tax rate of 15% on their €75,000-plus salaries”.
Over the past few years the different ‘schemes’ which have been put in place by the Maltese administrations have left results and have in fact attracted a large number of individuals to our islands wishing to avail of a special tax rate.
The ‘residence schemes’ have evolved from the Permanent Residence Scheme, to the High Net Worth Individuals Scheme (which scheme is still in place for EU/EEA/ Swiss nationals) to the Global Residence Program earlier this summer. All three ‘schemes’ can be summarised as a special tax status, where to qualify the beneficiary had to rent or purchase property and is subject to a minimum amount of tax. Not all three ‘schemes’ are still available, in fact the Permanent Residence Scheme has been phased out and the High Net Worth Individuals Scheme is currently only applicable to EU/ EEA/ Swiss nationals and is in the process of also being phased out. The Global Residence Program on the other hand is only applicable to non-EU, non-EEA and non-Swiss nationals.
Another successful scheme has been that of the Highly Qualified Persons, which involves a set of specific tax rules intended to attract top expertise and skill in the financial services, remote gaming and aviation sectors, enabling operators in these sectors to attract and recruit the highest qualified, experienced and senior professionals. Senior employees engaged by licensed / recognised operators in the financial services, remote gaming and aviation sectors may benefit from a flat rate of 15% on employment income derived in respect of work or duties carried out in Malta. The eligibility is dependant on various matters but one would need to initially satisfy the basic salary (exclusive of the annual value of any fringe benefits) which has to be at least €80,100 in terms of a contract of employment (the €80,100 is adjusted in terms of the Retail Price Index for 2013 - this basic salary is adjusted every year).