Malta has introduced a unified and consolidated flat-rate tax regime for highly skilled individuals through the Tax Treatment of Highly Skilled Individuals Rules 2026, effective as from 1 January 2026. The new framework replaces previously fragmented schemes and establishes a single legal structure governing preferential tax treatment.
Overview
Under the new rules, individuals who qualify as highly skilled employees are subject to a flat income tax rate of 15% on qualifying employment income that:
- arises from activities physically carried out in Malta;
- includes remuneration relating to duties performed outside Malta where such duties are connected to Maltese employment, including periods of leave linked to such employment; and
- is subject to Maltese income tax.
This treatment applies provided that the individual earns a minimum annual qualifying employment income of €65,000. The 15% flat rate applies up to a ceiling of €7 million per annum, with any excess potentially subject to ordinary Maltese income tax rules.
Taxpayers benefiting from the regime are not eligible for other tax reliefs, deductions, or credits in respect of the qualifying income.
Eligibility Requirements
To benefit from the regime, individuals must meet a series of cumulative conditions reflecting both the legal nature and the substance of the employment relationship:
- In particular, the individual must derive taxable employment income under Maltese law, consisting of emoluments from a qualifying employment contract, including (as mentioned) remuneration for duties performed in Malta, related duties performed abroad, and associated leave periods.
- Furthermore, the individual must qualify as an employee under Maltese law, meaning the activity constitutes genuine and effective work performed under the direction of another person, for remuneration and with the required competence, irrespective of the formal legal classification of the relationship.
- The regime applies only to individuals with appropriate professional qualifications performing activities within an eligible office, as demonstrated to the satisfaction of the competent Maltese authority.
- Eligibility is further conditional upon the individual not having benefited from other preferential expat tax regimes, including the Investment Services and Insurance Expatriate regime.
- From a compliance perspective, the individual must fully disclose all employment income under the qualifying contract, including any related-party income linked to that employment (i.e. correctly discloses the respective income for Maltese tax purposes).
- In addition, the individual must satisfy a number of personal and economic substance requirements. These include demonstrating:
- 1. access to stable and sufficient financial resources
- 2. residing in accommodation that meets Maltese standards for comparable households
- 3. maintaining private medical insurance covering all standard risks
- 4. in possession of a valid travel document and
- 5. must not be domiciled in Malta
- The competent authority retains discretion to impose further conditions where appropriate, including obligations relating to training, knowledge transfer, or sector-specific requirements.
Duration and Renewals
The regime applies for an initial period of five years.
Upon expiry, the individual may apply for up to two additional five-year extensions, each subject to an incremental increase of €10,000 in the minimum qualifying annual salary threshold.
Eligible Roles and Sectors
Eligible offices generally include:
- Top-level executive positions
- Senior management roles
- Highly specialised technical or professional functions
Relevant sectors typically include financial services, gaming, aviation and maritime industries, offshore oil and gas, healthcare and life sciences, and STEM-related fields.
Nomad Residence Permit
Updated guidelines have also been issued in respect of the Nomad Residence Permit (Income Tax) Rules, which provide for a 10% tax rate on income derived from authorised remote working activities.
Non-resident employers of Nomad Residence Permit holders are generally not subject to Maltese payroll obligations, provided no Maltese tax residence or permanent establishment is created.
Practical Considerations
The flat tax regime applies strictly to qualifying employment income arising from activities carried out in Malta. Other categories of income — such as investment income, capital gains, and unrelated foreign-source income — remain subject to the ordinary Maltese tax rules.
The regime is highly structured and compliance-driven. Eligibility depends not only on satisfying the formal criteria, but also on demonstrating the substantive nature of the employment relationship, proper income disclosure (including related-party flows), and ongoing compliance with administrative requirements. Given the level of discretion afforded to the competent authority and the fact-specific nature of the conditions, careful analysis is required in each case.