Special Tax Rate introduced on Qualifying Employment in the Maritime, Oil and Gas Industries
Legal notice 140 of 2018 brings into force a programme that allows individuals employed in the maritime and oil and gas industry to benefit from a flat rate of 15% tax rate on their employment income.
For this tax rate to apply, the individual must be resident but not domiciled in Malta, carrying out work or duties in Malta and entitled to a minimum annual salary of €65,000 (excluding fringe benefits) in terms of their contract of employment.
In terms of the rules, eligible employment and offices in relation to Maritime Activities are defined as:
- Chief Executive/Operations Financial Officer
- Managing Director
- General/Crewing/Technical Manager
- Technical Ship Superintendent
- Designated Person Ashore
- Chief Mate
- Second Officer
- Chief/Second Engineer
Furthermore, eligible offices in the Oil and Gas industry include:
- Chief Executive Officer
- Chief Operating Officer
- Head of Training Academy
These rules come into effect as from the year of assessment 2017 for Servicing of the Offshore Oil and Gas and ancillary services industry and from the year of assessment 2018 for Maritime Activities.
The option is available for five years for EEA and Swiss nationals and for four years for third-country nationals. Individuals opting for the 15% flat tax rate may not claim any other reliefs, deductions, credits or set offs.
Furthermore, income subject to the provisions of this option shall constitute the first part of the total income, meaning that tax on any other income shall be calculated as if the option was not exercised.