The Tax Treatment of Highly Skilled Individuals Rules has introduced revised criteria for highly skilled individuals benefitting from a 15% tax rate on their qualifying employment income. The new Rules came into effect as from 1 January 2026 (year of assessment 2027).
Eligibility
The individual must be employed in an eligible office to qualify, working within one of the following appropriate licenced sectors:
The Rules specify a number of eligible offices, namely:
Further, a number of conditions must be satisfied by the individual in order to be eligible for the flat tax rate, which include, amongst others:
The benefit
A beneficiary may opt to be taxed at the flat tax rate of 15% on the entirety of the income earned from a qualifying contract of employment in an eligible office, provided that the qualifying income, excluding any fringe benefits, amounts to at least sixty-five thousand euros (€65,000), which is adjusted by an increase of ten thousand euros (€10,000) every five years.
The benefit is applicable for a period of five years, commencing in the year in which a formal determination is issued, and may be extended for an additional two periods of five years each, subject to the respective conditions being maintained.
Submission of application
Applications are open for a 10-year period starting from 1 January 2026 till 31 December 2035.
The individual would be required to apply to the respective competent authority in Malta for a formal determination confirming eligibility to the favourable tax rate.
Further, the benefit is exercised for each year of assessment by means of a declaration, to be attached to the Income Tax Return and filed with the Tax Authority in Malta.
Current beneficiaries under existing schemes
These rules are set to replace the following existing programmes:
No further benefit may be availed of under the above-mentioned programmes after year of assessment 2030. Beneficiaries under such programmes may transition to the new rules by submitting a formal application to the respective competent authority by 31 December 2028.
Where the minimum qualifying income for beneficiaries under the existing programmes is less than €65,000, the new Rules provide a staggered 3-year transitionary period, whereby the minimum threshold is to increase as from the first year in which such Rules come into force.
How can we help?
KPMG in Malta can advise you on eligibility, its implications, and assist you in claiming this status. If you would like to know more about this status, or discuss any other personal income tax matter, please do get in touch with us.
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