Are you eligible for the new Tax Programme?


Legal Notice 140 of 2018 has introduced the implementation of new rules named ‘The Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities’ which programme will allow senior employees engaged within the maritime, oil and gas industry to benefit from a flat rate of 15% tax on employment income derived in respect to work or duties that would have been carried out in Malta.

It is worth highlighting that like any other programme, in order to be eligible for the said Programme, there are certain conditions that would need to be met:

  • Income from a qualifying employment qualifies under the said Programme when it consists in income of a minimum of sixty-five thousand Euro (€65,000);
  • Employment income needs to be subject to income tax in Malta;
  • Disclosure for tax purposes and declaration of emoluments received in respect of income from a qualifying contract of employment and all income received from a person related to the applicant’s employer paying out income from a qualifying contract as chargeable to tax in Malta;
  • Employment contract is drawn up for exercising genuine and effective work in Malta;
  • The employment activity in the contract of employment had to be of an eligible office;
  • Be in possession of professional qualifications or experience;
  • Be in possession of stable and regular resources which are sufficient to maintain the applicant and the members of the applicant’s family without recourse to the social assistance system in Malta;
  • Be in possession of an accommodation regarded as normal for a comparable family in Malta and which meets the general health and safety standards in force in Malta;
  • Be in possession of a valid travel document;
  • Be in possession of sickness insurance in respect of all risks normally covered for Maltese nationals for the applicant and the members of the applicant’s family; and
  • Not to be domiciled in Malta.

Before one ascertains whether the above conditions can be met, one has to understand whether an eligible office according to the definition in the said Rules is being held. Indeed, an eligible office needs to be held with either any undertaking holding a Document of Compliance (DOC) issued in terms of the International Safety Management (ISM) Code or a Seafarer Recruitment and Placement Services License issued in terms of the Maritime Labour Convention or else any undertaking engaging the applicant for work on board any ship, excluding ships operating on regular services as well as ships whose use or operation requires certification in terms of the Commercial Vessels Regulations and which are berthed or anchored within the territorial waters of Malta or any port in Malta for at least a period of one month over a calendar year. Any undertaking which carries on mainly a trade or business consisting in the Servicing of the offshore oil and gas and ancillary services industry shall also be considered to be an eligible office.

The Legal Notice provides a list of eligible offices which can apply for the said Programme:

  • Maritime Activities
  • Chief Executive Officer
  • Chief Operations Officer
  • Managing Director
  • Chief Financial Officer
  • General Manager
  • Crewing Manager
  • Technical Manager
  • Technical Ship Superintendent
  • Designated Person Ashore
  • Master
  • Chief Mate
  • Second Officer
  • Chief Engineer
  • Second Engineer
  • Chef

Whilst in the servicing of the Offshore Oil and Gas and Ancillary Services Industry Activities, the eligible offices are the following:

  • Chief Executive Officer
  • Chief Operating Officer
  • Head of Training Academy (which Academy must be certified by an international accreditation institution).

The said programme is available for EEA and Swiss nationals, for a consecutive period of five years commencing from the first year of assessment in which the applicant is first liable to tax under these rules. On the other hand, third-country nationals can avail of the said programme for a consecutive period of four years. The applicant would also be eligible,  upon application,  for  a  one-time  extension  of  five  years  or  four  years respectively. Similar to the Highly Qualified Persons Rule, any income from a qualifying contract of employment which exceeds the sum of five million euro (€5,000,000) shall not be taxed.

In order to apply for the said Programme, documents need to be collected and submitted to Transport Malta as the competent authority for the vetting of the eligibility of the prospective applicant.

For more information please feel free to contact us on +356 2557 2557 or email us on [email protected]