New guidelines on Malta’s 15% tax for Highly Skilled Individuals Rules

The commissioner has now published guidelines for the Highly Skilled Individuals Rules, offering insights into the operation and scope of Malta's 15% tax rate. These guidelines provide additional clarity on the applicability of the rules and key methodologies for their practical administration.

The guidelines confirm that Malta Enterprise will issue determinations for entities involved in the following economic activities, where the employing entity is not regulated by another competent authority (e.g. MFSA, MGA, Transport Malta, Office of the Medical Officer to Government):

• Manufacturing
• Software development
• Industrial services related to manufacturing, health, biotechnology pharmaceuticals, life sciences
• Other innovative economic activities

Entities can take advantage of the 15% rate when their activities align with the specified categories, including those driven by innovation.

The guidelines also clarify the functions and responsibilities associated with eligible roles, outlining the duties expected for each category of senior or specialist position. This helps employers and applicants determine if a role qualifies by illustrating the level of strategic, managerial, technical, or regulatory responsibility required.

The rules and guidelines have removed previous restrictions that limited eligibility. Specifically, the 15% tax rate can now extend to eligible individuals with more than 25% ownership, directly or indirectly, in their employing company. Additionally, eligibility is unaffected by prior employment in Malta before the rules' introduction.

The guidelines introduce clearer administrative requirements:

• Late renewal applications will incur penalties, highlighting the importance of timely submissions. 
• Qualifying beneficiaries must meet all conditions annually, including salary thresholds, eligible roles, and ongoing employment with the qualifying entity. 

How can we help?

Our specialised individuals tax team can support employers and individuals in assessing eligibility under the new rules and assist in the successful approval of each qualifying individual by the respective competent authority. Since application forms are not publicly available, we ensure a seamless process by coordinating directly with the competent authority and assisting with the necessary documentation. Our approach focuses on getting applications right the first time, reducing administrative friction and avoiding unnecessary delays. We can also assist with the preparation and submission of transitional and renewal applications within specific timelines.

Given that this is a newly introduced rule set, some practical aspects remain untested, and interpretative points are still evolving despite the guidelines' publication. We continue to monitor developments closely to ensure we're well-positioned to help employers and individuals in navigating the new framework.