Malta’s New 15% Tax Regime for Highly Skilled Individuals: What the 2026 Rules Mean for Employers and Professionals

Overview of the New Regime 

The Treatment of Highly Skilled Individuals Rules 2026 introduce a single, consolidated special tax programme for highly skilled employees working in Malta. Under these Rules, qualifying individuals may benefit from a flat tax rate of 15% on qualifying employment income of up to €7,000,000 per annum. 

At the same time, the Rules initiate the phasing out of a number of existing special tax programmes, replacing them with one harmonised regime. 

Who Can Benefit from the 15% Tax Rate? 

What Income Qualifies? 

Employment income qualifies for the beneficial tax treatment where all of the following conditions are met: 

(i) The income is received by a beneficiary; 

(ii) It constitutes income subject to tax as a gain or profit from an employment or office; 

(iii) The income amounts to at least €65,000 per annum, excluding the annual value of any fringe benefits; 

(iv) The employment activity is carried out in an eligible office; 

(v) The €65,000 threshold consists solely of emoluments derived from that eligible office. 

Who Qualifies as a Beneficiary? 

A beneficiary is an individual who satisfies all of the following conditions: 

(i) He derives qualifying employment income in respect of work carried out in Malta (or periods spent outside Malta that relate to that work, including leave); 

(ii) He is protected as an employee under Maltese law and performs genuine and effective work for another person; 

(iii) He is remunerated for that work; 

(iv) He possesses adequate and specific competence, to the satisfaction of the competent authority; 

(v) He holds recognised professional qualifications (or, by way of derogation, has at least five years’ professional experience at a level comparable to such qualifications and relevant to the profession); 

(vi) He has not previously benefited from the Investment Services and Insurance Expatriates regime under Article 6 of the Income Tax Act; 

(vii) He fully discloses all emoluments received from the qualifying contract of employment; 

(viii) He fully discloses any emoluments received from a person related to his employer where the activity is substantively derived from the qualifying employment; 

(ix) He performs activities falling within an eligible office; 

(x) He has sufficient resources to maintain himself and his family in Malta; 

(xi) He resides in accommodation regarded as normal for himself and his family in Malta; 

(xii) He holds a valid travel document; 

(xiii) He holds private medical insurance covering all risks normally covered for Maltese nationals; and 

(xiv) He is not domiciled in Malta. 

What is an Eligible Office? 

An eligible office is an employment or office which is regulated, licensed or recognised by one of the following competent authorities: 

(i) the Malta Financial Services Authority (MFSA); 

(ii)  the Malta Gaming Authority; 

(iii) the Authority for Transport in Malta in relation to certain undertakings; 

(iv) the Office of the Chief Medical Officer to Government; and 

(v) Malta Enterprise. 

The Rules provide detailed schedules specifying which employments and offices are considered regulated, licensed or recognised by each authority. 

How to Apply: The Approval Process 

Applications for the 15% special tax treatment must be submitted to the relevant competent authority. 

The competent authority must issue a formal determination or refusal within 90 days of receiving the application. Within the same 90-day period, the authority must inform the Commissioner for Revenue of its decision. 

The Commissioner then endorses the determination or refusal and notifies the applicant accordingly. 

The 15% Flat Tax Rate Explained 

Where an application is approved: 

• Employment income is taxed at a flat rate of 15%; 

• A minimum tax liability of €9,750 applies (being 15% of the €65,000 minimum qualifying income); 

• The 15% rate applies without the possibility of claiming any reliefs, deductions, credits or set-offs (except for deductions relating to tax paid at source); 

• The maximum amount of income that may benefit from the special rate is €7,000,000 per annum. 

The special tax treatment is exercised by means of a declaration signed by the beneficiary and endorsed by the competent authority. 

How Long Does the Benefit Last? 

The beneficial tax rate applies for a five-year period, commencing from the year in which the formal determination is issued. 

A beneficiary may apply for up to two further extensions, each lasting five years. 

Moving from Existing Tax Incentive Programmes 

Individuals who are already beneficiaries under any of the following programmes may apply to switch to the new Rules: 

(a)  Highly Qualified Persons Rules; 

(b) Qualifying Employment in Innovation and Creativity (Personal Tax) Rules; 

(c) Qualifying Employment in Aviation (Personal Tax); 

(d)   Qualifying Employment in Maritime Activities and the  Servicing  of  Offshore  Oil  and  Gas Industry  Activities(Personal Tax) Rules; or 

(e)   Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules; 

The competent authority must issue a determination within 60 days of receiving a switching application and notify the Commissioner accordingly. 

Transitional Minimum Tax Rules 

Where the minimum income threshold under the original programme is below €65,000, the following transitional minimum tax rules apply: 

• In the first year, the minimum income remains that specified under the original programme; 

• In the second year, that amount is increased by €10,000; 

• From the third year onwards, the minimum income threshold is set at €65,000. 

Special Protection for Highly Qualified Persons 

Beneficiaries previously applying the Highly Qualified Persons Rules will continue to benefit from the tax exemption on employment income exceeding €5,000,000 for income earned in the year in which the application to switch is made. 

Phasing Out of Existing Tax Regimes 

It is no longer possible to apply for determinations under the following programmes: 

• Highly Qualified Persons Rules; 

• Qualifying Employment in Innovation and Creativity (Personal Tax) Rules; 

• Qualifying Employment in Aviation (Personal Tax) Rules; 

• Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities (Personal Tax) Rules; or 

• Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules. 

In addition, no benefits under these programmes may be availed of after the year of assessment 2030. 

Final Thoughts and Professional Support 

The Treatment of Highly Skilled Individuals Rules 2026 represent a significant shift in Malta’s approach to attracting and retaining highly skilled professionals, consolidating multiple incentive regimes into a single, streamlined framework. While the Rules offer a generous and competitive tax rate, eligibility is subject to detailed conditions and a formal application process involving the relevant competent authority and the Commissioner for Revenue. 

Given the technical nature of the Rules and the interaction with previous special tax programmes, professional advice is strongly recommended before applying or switching regimes. We can assist with assessing eligibility, liaising with the competent authorities, and preparing and filing the application, ensuring full compliance with the applicable requirements. 

Should you require assistance or further clarification, please do not hesitate to contact us. 

Written by Matthew Muscat 

This article is intended for general information purposes only and does not constitute tax, legal or other professional advice. It provides a high-level summary of the Treatment of Highly Skilled Individuals Rules 2026 and reflects our interpretation of the Rules as at the date of publication. 

The application and impact of the Rules may vary depending on individual circumstances, and the Rules are subject to change and to interpretation by the relevant authorities. Accordingly, this article should not be relied upon as a substitute for specific professional advice. 

Readers are encouraged to seek tailored advice before taking any action based on the information contained herein.