L.S. 123.141 Regoli dwar Impjiegi Kwalifikanti fl-Innovazzjoni u fil-Kreattività

(1)In these rules, unless the context otherwise requires: "the Act" means the Income Tax Act; "artificial arrangement" shall include an arrangement in terms of which a beneficiary receives any benefit or payment, in whatever form, from a person who is related to his employer and such beneficiary does not declare for tax purposes such benefit or payment in Malta or is not liable to tax on such income in Malta; Citation. Interpretation. Amended by: L.N. 462 of 2014; L.N. 282 of

1. Cap.
2. "Commissioner" means the Commissioner for Revenue; "Corporation " means the Malta Enterprise Corporation as established in the Malta Enterprise Act; Cap.
3. "eligible office" means an employment in a role directly engaged in carrying out or management of research, development, design, analytical or innovation activities as may be further specified in the Guidelines published by the Corporation; "public interest" includes the interests of public safety, the protection of public order, national security, territorial integrity, public health or morals; "qualification" means any diploma, certificate, degree or other formal educational achievement in a subject area relevant to an eligible office, attained through an educational establishment attesting the successful completion of a post-secondary education programme at graduate level as recognized by the Malta Qualifications Recognition Information Centre as established by article 6 of the Mutual Recognition of Qualifications Act; Cap.
4. "relevant experience" means at least three years of experience in a role comparable to that of the eligible office as may be further specified in a Guideline document issued by the Corporation; ''relevant qualification'' means any diploma, certificate, degree or other formal educational achievement in a subject area relevant to an eligible office, attained through an educational establishment attesting the successful completion of a post-secondary education programme at graduate level as recognized by the Malta Qualifications Recognition Information Centre as established by article 6 of the Mutual *see regulation 1

(2)of these Regulations as originally promulgated. Cap. 451. 2 [ S.L.123.141 QUALIFYING EMPLOYMENT IN INNOVATION AND CREATIVITY (PERSONAL TAX) Recognition of Qualifications Act; "rights acquired under this law" means the right to elect to pay tax at the reduced rate of tax contemplated in article 56

(21)of the Act and these rules; "these rules" includes the provisions of these rules and of article 56

(21)of the Act; "third-country national" means any person who is not a citizen of the European Union within the meaning of Article 20 of the Treaty on the European Union and the Treaty on the Functioning of the European Union. if:

(2)A person shall be deemed to be related to a body of persons (

1. a)that person and the body of persons are, directly or indirectly, controlled or beneficially owned to the extent of more than twenty-five percent (25%) by the same persons; or (
2. b)that person owns, directly or indirectly, more than twenty-five percent (25%) of the ordinary share capital or voting rights of the body of persons. Qualifying contract. Amended by: L.N. 462 of 2014; L.N. 282 of 2019. 3.

(1)Income from a qualifying contract of employment qualifies under these rules when it is received by a beneficiary and consists in income subject to tax under article 4

(1)(b) of the Act (exclusive of the annual value of any fringe benefits) of a minimum of fifty-two thousand euro (€52,000) and consists of emoluments from an eligible office.

(2)A qualifying contract of employment shall be considered to be such if the employment activity contemplated in the contract of employment is an eligible office. Beneficiary. Amended by: L.N. 282 of

2. A beneficiary is an individual who meets all of the following conditions: (a) he is an individual who derives income subject to tax under article 4

(1)(

1. b)of the Act, being emoluments payable under a qualifying contract of employment, and received in respect of work or duties carried out in Malta in fulfilling the role required by the eligible office, or in respect of any period spent outside Malta in connection with such work or duties, or on leave during the carrying out of such work or duties; (
2. b)he is protected as an employee under Maltese law, irrespective of the legal relationship, for the purpose of exercising genuine and effective work for, or under the direction of, someone else, is paid, and has the required adequate and specific competence, as proven to the satisfaction of the Corporation; (
3. c)he proves to the satisfaction of the Corporation that he is in possession of a relevant qualification or relevant experience; QUALIFYING EMPLOYMENT IN INNOVATION AND CREATIVITY (PERSONAL TAX) [ S.L.123.141 3 (
4. d)he is not an individual who has benefited under article 6 of the Act; (
5. e)he fully discloses for tax purposes and declares emoluments received in respect of income from a qualifying contract of employment and all income received from a person related to his employer paying out income from a qualifying contract as chargeable to tax in Malta; (
6. f)he proves to the satisfaction of the Corporation that he performs activities of an eligible office; and (
7. g)he proves to the satisfaction of the Corporation that: (
8. i)he is in receipt of stable and regular resources which are sufficient to maintain himself and the members of his family without recourse to the social assistance system in Malta; (
9. ii)he resides in accommodation regarded as normal for a comparable family in Malta and which meets the general health and safety standards in force in Malta; (iii) he is in possession of a valid travel document; (
10. iv)he is in possession of sickness insurance in respect of all risks normally covered for Maltese nationals for himself and the members of his family; and (
11. v)he is not domiciled in Malta. 5.

(1)When an individual exercises the option available under article 56

(21)of the Act in respect of a year of assessment, the minimum amount of income which shall be chargeable to tax at the reduced rate provided for in that sub-article in respect of that year of assessment shall be deemed to be forty-five thousand euro (€45,000): Provided that the rate of 15% shall apply without possibility to claim any relief, deduction, reduction, credit or setoff of any kind. Notwithstanding the generality of the foregoing, a beneficiary shall be allowed deductions of tax under article 23 of the Income Tax Management Act. Minimum amount chargeable to tax. Amended by: L.N. 462 of 2014; L.N. 282 of 2019. Cap. 372.

(2)The option available under article 56

(21)of the Act may not be exercised in respect of any year of assessment preceding the year of assessment 2013. 6.

(1)The option available under article 56

(21)of the Act shall apply for: (a) a consecutive period of up to four

(4)years commencing from the year immediately preceding the year of assessment in which the individual is first liable to tax under the provisions of the Act; (b) by application, to any additional periods of up to five

(5)consecutive years.

(2)Subject to the continued adherence to these rules the rights acquired shall continue to apply if the individual enters into a new Claw back of benefits. Amended by: L.N. 462 of 2014; L.N. 282 of 2019. 4 [ S.L.123.141 QUALIFYING EMPLOYMENT IN INNOVATION AND CREATIVITY (PERSONAL TAX) contract of employment which is also considered to be an eligible office and there is no more than thirty

(30)days between the termination of one contract of employment and the commencement of the other contract of employment.

(3)Rights acquired under these rules shall be deemed to have been withdrawn with immediate effect if the grant of benefits under these rules and the beneficiary’s stay in Malta are not in the public interest.

(4)Rights acquired under these rules shall be withdrawn if a beneficiary directly or indirectly acquires immovable property situated in Malta or any real rights thereon. Persons already in Malta. Anti-abuse provisions. Cap. 372. 7. Deleted by Legal Notice 282 of 2019. 8.

(1)Where any person, in order to obtain benefits under these rules, makes use of artificial arrangements, the Commissioner shall, by order in writing, determine the liability to tax of the said person, for any year of assessment, in such manner and in such amount as may be necessary, in the circumstances of the case to nullify benefits obtained under these rules. A person who disagrees with an order served upon him as aforesaid shall have the same rights to object to that order and to appeal from a decision of the Commissioner refusing that objection as if that order were an assessment issued under the Income Tax Management Act and the relevant provisions of that Act relating to objections and appeals shall apply mutatis mutandis: Provided that if any person claims a benefit under these rules when that person was not entitled to the said benefit, such person shall be liable to pay a penalty equal to the amount of benefit claimed and if the benefit was in fact paid to him that person shall in addition be liable to repay the benefit received and to additional tax of seven per cent per month or part thereof commencing from the month in which the said benefit was paid to him up to the month in which he repaid the benefit and any payment made by the said person in respect of the tax repayable by him in terms of this proviso shall first be applied against any additional tax due thereon: Provided further that liability to pay additional tax in terms of the preceding proviso shall not be applicable when the person referred to therein proves that he has acted in good faith.

(2)For the purposes of this rule, "benefit" shall mean the total tax saved by an individual who elects to apply these rules. Request for information. 9.

(1)For the purpose of ascertaining an individual’s right to exercise the option referred to in these rules and ensuring the proper application of these rules, the Commissioner and the Corporation may require that individual to produce, within the time indicated by the Commissioner and the Corporation in that request, such further information and documents as the Commissioner and the Corporation may consider necessary, including certifications QUALIFYING EMPLOYMENT IN INNOVATION AND CREATIVITY (PERSONAL TAX) [ S.L.123.141 5 and declarations of the employer of that individual.

(2)If an individual fails, without any valid reason, to comply with any request relating to his income made to him by the Commissioner and the Corporation in accordance with this rule, the Commissioner and the Corporation may order that article 56

(21)of th e A c t s h a ll n ot a p p l y t o t h a t i n c o m e . I n su c h a c a s e , t h e Commissioner may make an assessment and the tax on that income shall be calculated at the rates provided for in the Act without any reference to the said sub-article. 10. The option available under article 56

(21)of the Act shall be exercised by means of a declaration signed by the beneficiary and endorsed by the Corporation made on such form or in such manner as the Commissioner may require and attached to or included in the tax return for the relative year of assessment. It shall not be deemed to have been validly exercised unless the income to which it applies has been fully and correctly declared in the said tax return and unless the said declaration and tax return are filed by not later than the relative tax return date: Manner in which option is exercised. Provided that when the said declaration or the relative tax return is filed later than the tax return date, the Commissioner may treat the option as having been validly exercised if he is satisfied that the delay was due to a reasonable excuse. 11.

(1)An application for a formal determination relating to eligibility under these rules shall be made on such form or in such manner as the Corporation may require and shall contain the information and documents therein requested. Determinations and attestations. Substituted by: L.N. 282 of 2019.

(2)The Corporation shall issue a formal determination that an individual has proven to its satisfaction, compliance with these rules and shall in such formal determination specify also the number of years in which the option available under article 56

(21)of the Act can be availed of in accordance to these rules.

(3)The Corporation shall forward a copy of any determination issued to the Commissioner.

(4)After consultation with the Corporation, the Minister responsible for Justice shall determine whether a beneficiary’s permanent stay in Malta is not in the public interest.

1. Deleted by Legal Notice 282 of
2. Exercise of benefit.
3. (Deleted by Legal Notice 462 of 2014) Eligible offices.
4. No determination shall be issued by the Corporation after the 31st December 2025 and no further benefit may be availed after year of assessment
5. Cessation of these rules. Amended by: L.N. 68 of
6. Substituted by: L.N. 282 of 2019.