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Malta Aviation Tax Scheme Guidelines Released

by Jason Gorringe, Lowtax.net, London
20 July, 2016

Malta's Inland Revenue Department has issued guidelines on the new preferential flat tax rate of 15 percent available to non-domiciled individuals employed in the Maltese aviation industry.

The flat tax rate took effect from May 24, 2016, and applies to income brought to charge in the 2017 year of assessment. It is intended to attract qualified individuals to work in Malta's aviation industry. A list of eligible occupations is provided in the "Tax Guidelines on Qualifying Employment in Aviation (Personal Tax) Rules" issued by the Inland Revenue and includes senior management positions and aviation engineers.

Eligible individuals' Income will be subject to the flat tax rate of 15 percent providing their income amounts to at least EUR45,000 (USD50,000) each year. The 15 percent flat tax rate applies for a consecutive period of five years for nationals of the European Economic Area (that is, European Union countries as well as Norway, Iceland, and Liechtenstein, and Switzerland) and for a consecutive period of four years for third-country nationals.

The four- or five-year period, as the case may be, commences from the year when the individual concerned first becomes taxable in Malta. In cases where the individual was taxable in Malta but not benefiting under this scheme and subsequently becomes eligible under the scheme, he/she can benefit only if the four- or five-year period has not elapsed. In this case the benefit is then available for the years remaining from the date of eligibility under the scheme until the said four- or five-year period from the date of first being subject to tax in Malta elapse.

Individuals wishing to benefit from the 15 percent flat tax rate must complete a form and submit this to Transport Malta.

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