The objective of the Highly Qualified Persons (‘HQP’) Rules, brought into effect through introduced by virtue of Legal Notice 106 of 2011 is a scheme intended to attract highly qualified persons to take up jobs in sectors where expertise was deemed to be insufficient, such as financial services, gaming and aviation, with companies 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 (‘qualifying companies’). The tax benefits available under this scheme apply to EU / EEA / Swiss Nationals for a maximum consecutive period of 5 years and to Third Country Nationals for a maximum consecutive period of 4 years, from the year when the individual first becomes taxable in Malta. EU / EEA / Swiss Nationals who are beneficiaries under HQP Rules may apply for a one-time extension of 5 years in accordance with an amendment to the regulations in 2015.
The special tax status granted under the Highly Qualified Persons Rules allow the beneficiary to be subject to a favourable tax rate of 15% on all income derived from their employment in Malta, up to a maximum of €5,000,000. Any income in excess of this amount is not subject to tax.
An individual may only apply for special tax status under the HQP Rules if he:
- is in employment with a ‘qualifying company’ (as defined above);
- the role within which he is employed falls under the definition of ‘eligible office’ (as defined below);
- the minimum income received from such employment exceeds 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
- has the necessary qualifications and at least 5 years’ experience;
- is not be domiciled in Malta;
- does not benefit under any other special tax scheme in Malta;
- is a ‘fit and proper’ person in accordance with due diligence checks carried out in his respect; and
- is in possession of adequate health insurance cover for himself and his dependents.
“Eligible office” comprises employment in one of the following positions:
- 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; and
- Odds Compiler Specialist.
‘Eligible office’ in an aerodrome licensed undertaking refers to employment as a Chief Executive Officer.
The individual income derived from employment in an “eligible office” will not qualify for the 15% reduced rate if:
- The income is paid by an employer who receives benefits under business incentive laws; or
- The income is paid by a person who is related to the employer who received any benefits under any business incentive laws; or
- If the beneficiary holds more than 25% (directly or indirectly) of the company with which he is employed for the purposes of claiming under the HQP Rules; or
- If the individual is already in employment in Malta before the coming into force of the scheme either with a company that is not a ‘qualifying company’ as defined above; or
- If the individual is already in employment in Malta before the coming into force of the scheme but not holding “eligible office”.
Any rights are withdrawn with retrospective effect if a beneficiary is a Third Country National and he either:
- Physically stays in Malta, in the aggregate, for more than 4 years; or
- Directly or indirectly acquires real rights over immovable property situated in Malta or holds a beneficial interest directly or indirectly consisting in, inter alia, of real rights over immovable property situated in Malta.