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Exclusions from the scheme

The individual income derived from employment in an ‘eligible office’ will not qualify for the 15% reduced rate if it is paid by an employer who receives any benefits under business incentive laws or is paid by a person who is related to the employer who received any benefits under any business incentive laws or if the individual holds more than 25% (directly or indirectly) of the company licenced and/or recognised by the Malta Financial Services Authority or if the individual is already in employment in Malta before the coming into force of the scheme either with a company not licenced and/or recognised by the Malta Financial Services Authority or not holding ‘eligible office’ with a company licenced and/or recognised by the Malta Financial Services Authority.

The individual income derived from employment in an ‘eligible office’ will not qualify for the scheme if a claim is made for any relief, deduction, reduction, credit or set-off of any kind except for any income tax deducted at source.


Provisions in respect of split contracts have been introduced. An arrangement in terms of which a beneficiary receives a payment from a person related to his employer and such payment is not declared for tax purposes in Malta is considered to be an artificial arrangement.


Any rights are withdrawn with retrospective effect if a beneficiary is a third country national and he/she either:
 

  • Physically stays in Malta, in the aggregate, for more than four years; or
     
  • Directly or indirectly acquires real rights over immovable property situated in Malta or holds beneficial interest directly or indirectly consisting in, inter alia, of real rights over immovable property situated in Malta.


Any individual who claims a benefit under the scheme when he is not entitled to do so is liable to a penalty equal to the amount of benefit claimed and if the benefit is paid the individual is liable to repay the benefit received plus additional tax of 7% per month or part thereof.