On 22 January 2024, Malta’s Commissioner for Revenue released the updated guideline regarding the tax benefits available to investment services and insurance expatriates under Article 6 of the Income Tax Act. The objective of the tax benefits of Article 6 of the Income Tax Act is to attract highly skilled expatriates to Malta to work for companies that are licensed and recognized by the Competent Authority regulating the specific sector.
Investment Services Expatriate
According to Article 6 of the Income Tax Act, an Investment Services Expatriate shall mean any individual who is an employee of, or provides services to, a company that is:
a) an investment services company holding an investment services license issued under Article 6 of the Investment Services Act or
b) a company which is recognized by the relevant Competent Authority for the purposes of Article 9A of the Investment Services Act and whose activities solely comprise the provision of the following:
- Management
- Administration
- Safekeeping
- Investment advice to collective investment schemes as defined in the Investment Services Act
Insurance Expatriate
An Insurance Expatriate refers to any individual who is an employee of, or provides services to, an “insurance company” that is defined by Article 6 as meaning:
- a company authorized under Article 7 of the Insurance Business Act or
- an insurance manager as defined in Article 2 of the Insurance Distribution Act or
- a company carrying on the business of insurance broking under Article 12 of the Insurance Distribution Act.
Who can Qualify
An Investment Services Expatriate or an Insurance Expatriate has to satisfy the abovementioned conditions and either:
- is not an ordinary resident and not domiciled in Malta or
- was not resident in Malta for a minimum period of three years immediately preceding the year in which he commences such employment with or provides services to any investment services company or insurance company as aforesaid and provided that during the said three years, such individual has been engaged on a full-time basis in a similar position outside Malta.
Exemptions from Tax under Article 6
An Investment Services or Insurance Expatriate is eligible for exemption from tax on the following personal expenses paid on his behalf or behalf of his immediate family by the employing investments services company or insurance company:
- Removal costs in respect of relocation to or from Malta
- Accommodation expenses incurred in Malta
- Travel costs in respect of visits to or from Malta by the expatriate and his immediate family
- Provision of a car in Malta
- A subvention of not more than €600 per calendar month
- Medical expenses and medical insurance, g) School fees of respective children.
Additional Benefits of Article 6
An investment services expatriate or insurance expatriate will be treated as not resident in Malta for the purposes of Article 12 (1)(c) of the Income Tax Act. This means that the following income will be exempt from tax:
a) Interest, discount, premium, or royalties
b) Gains or profits from the transfer of, or on a transfer of any rights over:
- any units in a collective investment scheme, as defined in Article 2 of the Investment Services Act
- any units relating to the linked long-term business of insurance
- any interest in a partnership that is not a property partnership
- any shares or securities in a company which is not a property company.
