L.S. 123.182 Regoli dwar Impjieg Kwalifikanti f’Attivitajiet Marittimi u l-Attivitajiet tal-Industrija tas-Servizzjar taż-Żejt u l-Gass Offshore (Taxx

(1)The title of these rules is the Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities (Personal Tax) Rules. Citation and commencement.

(2)These rules shall be deemed to have come into force as from the year of assessment 2017 as regards eligible offices in the Servicing of the Offshore Oil and Gas and ancillary services industry and as from the year of assessment 2018 as regards eligible offices in Maritime Activities. 2.

(1)In these rules, unless the subject or context otherwise requires: "the Act" means the Income Tax Act; Interpretation. Amended by: L.N. 209 of 2019. Cap. 123. "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; "Commissioner" means the Commissioner for Revenue; "competent authority" means the Authority for Transport in Malta established in terms of article 5 of the Authority for Transport in Malta Act; "education qualification" means any diploma, certificate or other evidence of formal qualifications issued by an educational establishment attesting the successful completion of a post secondary education programme, namely a set of courses provided by an educational establishment recognised as an education institution by the State in which it is situated; "eligible office" is an employment defined as key for the operations of the particular undertaking and whose function is confirmed by the competent authority, based on an administrative assessment procedure, which office is listed in Cap. 499. 2 [ S.L. 123.182 QUALIFYING EMPLOYMENT IN MARITIME ACTIVITIES AND THE SERVICING OF OFFSHORE OIL AND GAS INDUSTRY ACTIVITIES (PERSONAL TAX) the Schedule and which is held with any of the following; (

1. i)any undertaking holding a Document of Compliance (DOC) issued in terms of the International Safety Management (ISM) Code or a Seafarer Recruitment and Placement Services Licence issued in terms of the Maritime Labour Convention, 2006; or S.L.499.23. S.L. 234.35. (
2. ii)any undertaking engaging the particular individual for work on board any ship, excluding ships operating on regular services as well as ships whose use or operation requires certification in terms of the Commercial Vessels Regulations and which are berthed or anchored within the territorial waters of Malta or any port in Malta for at least a period of one month over a calendar year (hereinafter collectively "Maritime activities"); For the purposes of these rules, the term "regular services" shall have the meaning assigned to it in terms of the Merchant Shipping (Safe Operation of Regular Ro-Ro Ferry and High-Speed Passenger Craft Services) Regulations; or (iii) any undertaking which carries on mainly a trade or business consisting in the Servicing of the offshore oil and gas and ancillary services industry (hereinafter "Servicing of the offshore oil and gas and ancillary services activities"); "professional experience" means the actual and lawful pursuit of the profession concerned; "professional qualifications" means qualifications attested by evidence of education qualifications or, by way of derogation, when provided for by national law, attested by professional experience of a level comparable to education qualifications and which is relevant in the profession or sector specified in the work contract or binding job offer; "public interest" includes the interests of public safety, the protection of public order, national security, territorial integrity, public health or morals; "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" shall include the provisions of article 56

(21)of the Act and the rules contained in these rules; QUALIFYING EMPLOYMENT IN MARITIME ACTIVITIES AND THE SERVICING OF OFFSHORE OIL AND GAS INDUSTRY ACTIVITIES (PERSONAL TAX) [ S.L. 123.182 3 "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.

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

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. 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 sixty-five thousand euro (€65,000) and consists of emoluments from an eligible office. Income from a qualifying contract of employment. Amended by: L.N. 209 of 2019.

(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. 4. A beneficiary is an individual who meets 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, 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 competent authority; (
3. c)he proves to the satisfaction of the competent authority that he is in possession of professional qualifications or experience; (
4. d)he fully discloses for tax purposes and declares Beneficiary. 4 [ S.L. 123.182 QUALIFYING EMPLOYMENT IN MARITIME ACTIVITIES AND THE SERVICING OF OFFSHORE OIL AND GAS INDUSTRY ACTIVITIES (PERSONAL TAX) 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; (
5. e)he proves to the satisfaction of the competent authority that he performs activities of an eligible office; and (
6. f)he proves to the satisfaction of the competent authority that: (
7. 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; (
8. 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) document; he is in possession of a valid travel (
9. 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 (
10. v)Minimum amount of income chargeable. 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 sixty-five thousand euro (€65,000): Provided that should income from a qualifying contract of employment exceed the sum of five million euro (€5,000,000), no further tax would be charged on income from a qualifying contract of employment in excess of five million euro (€5,000,000): Provided that the rate of 15% shall apply without possibility to claim any relief, deduction, credit or set off of any kind: Cap. 372. Provided that, a beneficiary shall be allowed deductions of tax paid in terms of article 23 of the Income Tax Management Act.

(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 2017 as regards eligible offices in the Servicing of the Offshore Oil and Gas and Ancillary Services Industry and any year of assessment preceding the year of assessment 2018 as regards eligible QUALIFYING EMPLOYMENT IN MARITIME ACTIVITIES AND THE SERVICING OF OFFSHORE OIL AND GAS INDUSTRY ACTIVITIES (PERSONAL TAX) [ S.L. 123.182 offices in Maritime activities. 6.

(1)The option available under article 56

(21)of the Act shall, with respect to EEA and Swiss nationals, apply for a consecutive period of five years commencing from the first year of assessment in which that person is first liable to tax under the provisions of the Act. EEA and Swiss nationals.

(2)The option available under article 56

(21)of the Act shall, with respect to third-country nationals, apply for a consecutive period of four years commencing from the first year of assessment in which that person is first liable to tax under the provisions of the Act.

(3)Rights acquired under this law 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)Notwithstanding anything to the contrary contained in these rules any person who falls under the provisions of sub-rule

(1)or sub-rule

(2), irrespective of whether he has availed himself of the benefit provided by these rules or not, shall be eligible, upon application, for a one-time extension of five years or four years respectively to his qualifying period, subject to the continued adherence to the other provisions of these rules: Provided that the eligibility under the said rules shall not exceed a consecutive period of ten years commencing from the year preceding the first year of assessment in which that person is first liable to tax under the provisions of the Act. 7.

(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 Artificial Arrangements. Cap. 372. 5 6 [ S.L. 123.182 QUALIFYING EMPLOYMENT IN MARITIME ACTIVITIES AND THE SERVICING OF OFFSHORE OIL AND GAS INDUSTRY ACTIVITIES (PERSONAL TAX) 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. Further information and documents. 8.

(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 competent authority may require that individual to produce, within the time indicated by the Commissioner and the competent authority in that request, such further information and documents as the Commissioner and the competent authority may consider necessary, including certifications 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 competent authority in accordance with this rule, the Commissioner and the competent authority may order that article 56

(21)of the Act shall not apply to that income. In such a case, the 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-rule. Option available under article 56

(21)of the Act. 9. 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 competent authority 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: 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. Formal Determination. 10.

(1)For the purposes of rule 4, the competent authority shall issue a formal determination relating to anything which needs to be proven to its satisfaction in terms of these rules. QUALIFYING EMPLOYMENT IN MARITIME ACTIVITIES AND THE SERVICING OF OFFSHORE OIL AND GAS INDUSTRY ACTIVITIES (PERSONAL TAX) [ S.L. 123.182 7

(2)An application for a formal determination relating to eligibility under these rules shall be made on such form or in such manner as the competent authority may require and shall contain the information and documents therein requested.

(3)After consultation with the competent authority, the Minister responsible for Justice shall determine whether a beneficiary’s stay in Malta is not in the public interest. 11. For the purposes of rule 9, the competent authority shall, following an application, filed by a beneficiary, endorse the form required by the Commissioner. SCHEDULE (Rule 2) Eligible Employment and Offices Maritime Activities Chief Executive Officer Chief Operations Officer Managing Director Chief Financial Officer General Manager Crewing Manager Technical Manager Endorsement of the form. 8 [ S.L. 123.182 QUALIFYING EMPLOYMENT IN MARITIME ACTIVITIES AND THE SERVICING OF OFFSHORE OIL AND GAS INDUSTRY ACTIVITIES (PERSONAL TAX) Technical Ship Superintendent Designated Person Ashore Master Chief Mate Second Officer Chief Engineer Second Engineer Chef Servicing of the Offshore Oil and Gas and Ancillary Services Industry Activities Chief Executive Officer Chief Operating Officer Head of Training Academy (which Academy must be certified by an international accreditation institution).