Amendment to the Qualifying Employment in Aviation (Personal Tax) Rules


Legal Notice 1 of 2017 has amended the Qualifying Employment in Aviation (Personal Tax) Rules which were originally promulgated in 2016.

Under the Qualifying Employment in Aviation (Personal Tax) Rules (the “Rules”), Rules which have come into force specifically under the auspices of the Maltese Income Tax Act, expatriates holding an eligible office under a qualifying contract of employment in the aviation industry may opt to benefit from a reduced flat rate of tax of 15% on their employment income derived in respect of work or duties carried out in Malta.

An applicant must hold an eligible office with companies licensed and recognised within the remit of the Authority for Transport in Malta (TM), and the applicant’s annual salary must be of at least €45,000 for basis year 2016 in order to qualify for the Rules.

This Programme has been available to nationals of the European Economic Area, Switzerland and third countries since its conception in 2016. The tax incentives available to EEA and Swiss Nationals are for a maximum period of five (5) consecutive years, while the tax incentives for third-country nationals are available for a maximum period of four (4) consecutive years. These timeframes are also known as qualifying periods.

The aforementioned legal notice has brought into effect amendments to the Rules, in particular to the qualifying periods for which individuals will be eligible to opt for the 15% reduced tax rate.  Through these amendments, nationals of the European Economic Area and Switzerland are now eligible, to a one-time extension of five (5) years to their qualifying period, while third country nationals are eligible for a one-time extension of four (4) years to their qualifying period. This one-time extension is provided for upon application and is subject to the continued adherence to the provisions and minimum qualifications of the Rules.

Furthermore, the maximum qualifying period for individuals benefitting from the Qualifying Employment in Aviation (Personal Tax) Rules, shall not exceed ten (10) years of assessment commencing from the year the individual is first liable to tax under the Income Tax Act.