Malta has long used tax incentives to attract highly skilled workers to its shores, promising a flat income tax rate of 15 per cent. 

However, the new Tax Treatment of Highly Skilled Individuals Rules, that came into force this year, bring a more calibrated approach to what was previously a fragmented and at times loosely defined framework.

It streamlines the Highly Qualified Persons tax rules, with sector-specific ones for people who work in aviation, maritime, innovation and creativity, and family offices.

To benefit from these must earn a salary of at least €65,000 a year as of 2025, adjusted upwards by €10,000 every five years, meaning that their income would need to be at least €75,000 by 2031 and €85,000 by 2036.

This is technically a lowering of the threshold from the original Highly Qualified Persons rules, which established a minimum €75,000 income for 2010, rising to €102,422 by 2026. 

However, the sector-focused rules had already established lower minimum salaries – €45,000 for aviation, €52,000 for innovation and creativity, and €65,000 for maritime and family offices.

With the exception of the family office rules, which were only introduced last year, these sector-focused rules hadn’t imposed salary increase thresholds until now. 

Since the minimum salary was relatively low in the aviation sector, it will be given a couple of years to catch up. The minimum €45,000 salary will remain in force this year but must increase by €10,000 next year and a further €10,000 in 2028, before rising to €75,000 in 2031 along with all other sectors.

The full list of jobs eligible for tax incentives can be found here. They are largely similar to those covered by the old legislation, although they now include roles like AI Specialist and Cybersecurity Officer, as well as Head of Responsible Gaming, Chief People Officer, and Chief Legal Officer for iGaming.

Moreover, eligible scientists and engineers  are now required to hold a bachelor’s degree in the relevant field, a shift from the previous rules, which allowed relevant work experience as an alternative to formal education.

These rules don’t apply to tech workers, for whom relevant experience in the field is still deemed a suitable alternative.  

The 15 per cent flat rate is imposed up to a maximum annual income of €7 million, up from the previous maximum of €5 million. However, whereas excess income used to be exempt from income tax, it is now taxable in line with Maltese progressive income tax rates, which is capped at 35 per cent.