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The Qualifying Employment in Innovation & Creativity Rules (Personal Income Tax)

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The Qualifying Employment in Creativity & Innovation Rules were brought into force through Subsidiary Legislation 123.141, beneath the Malta Income Tax Act. This taxation scheme was mainly devised to attract to Malta individuals working within knowledge-based industries such as iGaming, engineering, technology and product development in order to address the skills gap present in Malta’s labour market. An applicant who is deemed eligible for this scheme would be able to benefit from an income tax rate of 15%, upon satisfying the conditions of the Rules.

Other than meeting all the relevant criteria, an individual must be employed and carrying out one of the following roles:

  • Industrial Research and Experimental Development, holding a postgraduate degree in sciences or engineering that is relevant to the particular role,
  • Product Development and Product/Process Innovation, holding a postgraduate degree in design, creativity, art, product development, sciences or engineering or having been engaged in a comparable role for at least three years,
  • Senior Management Role, reporting directly to the Board of Directors of the specific company and also subject to certain qualifications.

In addition to this, the following conditions must also be satisfied by the applicant:

  • The ability to prove that the applicant is receiving a salary of at least €45,000 per year,
  • The individual’s contract of employment is subject to Maltese employment law, issued by the individual’s employer and chargeable to tax in Malta,
  • Possesses the necessary qualifications, issued by an educational institution recognised by the Malta Qualification Recognition Information Centre (MQRIC) and confirming that the individual successfully completed the relevant postgraduate degree,
  • Has not previously benefited from any fiscal entitlements in relation to relocation and other costs,
  • Prove that their occupation falls within the eligible job descriptions,
  • Prove that their income is being received in a stable and regular manner and is considered enough to sustain the individual along with any family members. In addition, the applicant must also prove that they are living in a standard residence that is usually occupied by Maltese families,
  • Have a valid sickness insurance covering the individual as well as family members for any risks that Maltese nationals are usually covered for,
  • Possesses a valid travel document,
  • Is not domiciled in Malta,
  • In the case that employment commences on the 1st January 2016, documentation related to the recruitment procedure, such as documents showing how the call for employment was promoted, must be presented,
  • The applicant does not control more than 25% of the shares within the employment.

This tax scheme is available to EU, EEA and third country nationals and is valid for a maximum period of three consecutive years, starting from the year before the one when the assessment takes place, in which the person is first liable to pay tax in Malta. Malta Enterprise, being the authority in charge of determining an individual’s eligiblity for this scheme, as well as the Commissioner for Inland Revenue are at liberty of requesting additional documentation from prospective applicants should this be required.

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