The Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities (Personal Tax) Rules, 2018 introduces a favourable flat tax rate of 15% chargeable on employment income derived by individuals working in such ambit, with respect to work or duties carried out in Malta or in respect of any period spent outside Malta in connection with such work or duties.

Highly Qualified Persons resident and non-domiciled in Malta may opt to be taxed at the flat tax rate of 15% on their income earned from a qualifying contract of employment in an eligible office, provided that the income, excluding any fringe benefits, amounts to at least €65,000. Furthermore, no tax would be charged on qualifying income exceeding €5,000,000 earned during the eligibility period.

EEA and Swiss nationals resident and non-domiciled in Malta will be able to benefit from the flat tax rate for a consecutive period of five years commencing from the first year of assessment in which that person is first liable to tax. With respect to third country nationals, such benefit shall apply for a consecutive period of four years. In all cases, these periods may be extended by another 5 year period, for a maximum period of 10 years (9 years in the case of third country nationals).

The Schedule to Legal Notice 140 of 2018 lists the employment and offices eligible to the flat tax rate. Highly Qualified Persons involved in shipping or yacht management, and holding positions such as Chief Executive Officer, Chief Operations Officer, Managing Director and a number of other managerial roles will benefit from the flat tax.

A number of conditions must be satisfied in order to be eligible for the flat tax rate, which include amongst others that the income must arise from a qualifying contract of employment; the person must not be domiciled in Malta; the person must have health insurance in respect of all risks for himself/herself and the members of his/her family; and the person may not have received any other benefit or arrangement in terms of business incentive laws. In order to be eligible, Highly Qualified Persons would be required to apply to the Authority for Transport in Malta for a formal determination confirming eligibility to the favourable tax rate.