Highly Qualified Persons and Tax in Malta |  Mar 07, 2010

15% flat tax on income for foreign specialized workers

Malta will shortly introduce a flat tax of 15% on income to attract foreign specialized workers in a bid to make it more attractive for companies to employ foreign experts on a temporary basis. This legislative move will complement the income tax regimes currently in force for foreign workers in Malta.

The Government has appointed American consultants, Angelou Economics, to draw up an economic development plan based on the administration’s Vision 2015. In its analysis of the economy Angelou Economic noted significant gaps in human resources, availability and training across many sectors; with companies finding it difficult to find Maltese workers to fill in specialized positions.

To-date, foreigners who are resident in Malta are taxed at the same rates applicable to Maltese residents. These are progressive rates of tax with a maximum rate of 35 per cent with different tax bands for single and married individuals. Non-resident foreigners are also taxed at progressive rates with a maximum rate of 35 per cent. However, the tax bands are as follows: The first €700 are tax-free while the next €2,400 are taxed at 20 per cent and the next €4,700 are taxed at 30 per cent. The remainder is taxed at 35 per cent. The current regime also has a flat tax rate option for foreigners who are registered in terms of the Resident Scheme Regulations. These are taxed at a flat rate of 15 per cent subject to a minimum tax payment of €4,192 per annum.

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