Tax Guidelines on Qualifying Employment in Aviation (Personal Tax) Rules

 

The rules came into force with effect on the 24th May 2016 and apply to income which is brought to charge in year of assessment 2017 (basis year 2016). The rules apply to individuals not domiciled in Malta.

Individual income from a qualifying contract of employment qualifies under these rules when it is received by a beneficiary in an eligible office. Such income is subject to tax at a flat rate of 15% provided that the income amounts to at least 45,000 euros (forty-five thousand euros) annually. The 15% tax rate applies for a consecutive period of five years.

 

The five year period commences from the year when the individual concerned first becomes taxable in Malta. In cases where the individual was taxable in Malta but not benefiting under this Scheme and subsequently becomes eligible under the Scheme, he/she can benefit only if the five year period has not elapsed; the benefit is then available for the years remaining from the date of eligibility under the Scheme until the said five year period from the date of first being subject to tax in Malta elapse.
Individuals who have availed themselves of the benefit under this scheme may apply for two extensions of five years each to the qualifying period.​

 

An individual may benefit from the 15% tax rate if the person satisfies all of the following conditions:

a. he is an individual who derives income subject to tax under article 4(1)(b) of the Act, being emoluments payable under a qualifying contract of employment, and received in respect of work or duties carried out in Malta, or in respect of any period spent outside Malta in connection with such work or duties, or on leave during the carrying out of such work or duties;
b. he is protected as an employee under Maltese law, irrespective of the legal relationship, for the purpose of exercising genuine and effective work for, or under the direction of, someone else, is paid, and has the required adequate and specific competence, as proven to the satisfaction of the competent authority;
c. he proves to the satisfaction of the competent authority that he is in possession of professional qualifications or experience;
d. he fully discloses for tax purposes and declares emoluments received in respect of income from a qualifying contract of employment and all income received from a person related to his employer paying out income from a qualifying contract as chargeable to tax in Malta;
e. he proves to the satisfaction of the competent authority that he performs activities of an eligible office; and
f. he proves to the satisfaction of the competent authority that: i.he is in receipt of stable and regular resources which are sufficient to maintain himself and the members of his family without recourse to the social assistance system in Malta;
ii. he resides in accommodation regarded as normal for a comparable family in Malta and which meets the general health and safety standards in force in Malta;
iii. he is in possession of a valid travel document;
iv. he is in possession of sickness insurance in respect of all risks normally covered for Maltese nationals for himself and the members of his family; and
v. he is not domiciled in Malta.

 
Application

 

An application for a formal determination relating to eligibility must be made to the Chairman, Transport Malta using this form.

 

The benefit is exercised for each year of assessment by means of a declaration made on the RA21 form signed by the beneficiary and endorsed by Transport Malta. The form once endorsed by Transport Malta is to be attached to the income tax return and filed with the Office of the Commissioner for Revenue by the tax return date.