Malta’s 15% Tax Regime for Highly Skilled Individuals
We have previously published an insight outlining Malta’s 15% tax regime for highly skilled individuals, providing an overview of the applicable rules and eligibility criteria.
This article builds on that background, focusing on the latest developments and practical clarifications.
The Malta Tax & Customs Administration (MTCA) has published detailed Guidelines in terms of Article 96(2) of the Income Tax Act, clarifying the practical application of Legal Notice 20 of 2026 - Tax Treatment of Highly Skilled Individuals Rules.
Contents
The Guidelines
The Guidelines provide important clarification on income thresholds, application procedures, renewal timelines, transitional arrangements, and the scope of eligible roles.
Set out below are the principal highlights and key points employers and applicants should be aware of:
1. Progressive Minimum Income Requirement
The Guidelines confirm that the minimum income threshold is not fixed, but increases automatically every five years:
€
6
5
,
0
0
0
applicable
from the introduction of the Rules
€
7
5
,
0
0
0
applicable
from basis year 2031
€
8
5
,
0
0
0
applicable
from basis year 2036
2. Transitional Rules for 2025 Applications
For eligible offices previously falling under the Qualifying Employment in Aviation (Personal Tax) Rules (S.L. 123.168), the Guidelines provide a phased transition:
€45,000
Year 1
€55,000
Year 2
€65,000
Year 3
Thereafter, these roles follow the same five-year increase mechanism as other eligible offices.
Moreover, applications submitted in calendar year 2025 under the Highly Qualified Persons Rules (S.L. 123.126) that remain undecided as at 31 December 2025 will be treated as applications under the new Rules only if:
All required information and documentation under the new Rules has been submitted, and
The application is fully complete
3. Annual Exercise of the 15% Tax Option
The Guidelines clearly state that the reduced 15% tax rate under Article 56(21):
Must be exercised annually
Applies separately for each year of assessment
Failure to exercise the option in a particular year results in the loss of the benefit for that year, even where a valid determination exists.
4. Scope of Competent Authorities
The Guidelines clarify that Malta Enterprise acts as the Competent Authority for entities engaged in:
Manufacturing
Software development
Industrial services analogous to manufacturing
Health, biotechnology, pharmaceuticals, life sciences
Other innovative economic activities
This applies only where the entity is not already regulated by another Competent Authority.
5. Eligible Offices
The Guidelines emphasise that:
Eligibility is determined by the functions and responsibilities of the role
Job titles are indicative, not determinative
In scientific and engineering fields, a Bachelor's degree or higher is mandatory, and experience alone is not an access route
In technology roles, eligibility may be me through qualifications or defined experience
Practical Application
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Important Considerations
While both the legislation and the relevant Guidelines have been formally issued, it remains to be seen how these Rules will be applied in practice as employers, applicants, and the various Competent Authorities become accustomed to the new framework. As with other tax incentive regimes, a degree of practical interpretation and administrative practice is expected to develop over time. Stakeholders are therefore encouraged to remain mindful that further clarification or practical adjustments in the application of the Rules may emerge as the regime is implemented in practice.
Get in touch with our team
The application of the Tax Treatment of Highly Skilled Individuals Rules requires careful coordination between tax, HR, and regulatory considerations. In practice, eligibility often hinges on the substance of the role, the structure of the employment contract, and the completeness and timing of submissions.
Our Team can assist employers and individuals with:
Assessing eligibility of roles and individuals under the new Rules and Guidelines
Reviewing documentation making sure they align with the Rules' requirements
Advising and Liaising with the correct Competent Authority and managing the determination process
Preparing and reviewing applications to ensure full compliance with the requirements
