SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX [ S.L. 123.218 SUBSIDIARY LEGISLATION 123.218 SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX RULES 1st January, 2025* LEGAL NOTICE 250 of 2025. 1. The title of these rules is the Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules. 2. Citation. In these rules, unless the context otherwise requires: Interpretation. "Act" means the Income Tax Act; Cap. 123. "artificial arrangements" means arrangements the terms thereof include: (
- a)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; (
- b)arrangements of collusion between employer and employee to ensure that a contract which in substance does not fall within the scope of these rules and article 56
(21)of the Act, would be given a form which enables it to qualify for benefits hereunder; "Commissioner" means the Commissioner for Tax and Customs; "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority Act; "eligible office" means an employment or an office listed in the Schedule; "licence holder" means a person who holds a licence issued by the Malta Financial Services Authority; "Multi Family Office" means a licence holder that * These rules shall apply with effect from the year of assessment 2026. Vide Article 1
(2)of Legal Notice 250 of
- Cap.
- 1 2 [ S.L. 123.218 SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX exclusively manages the wealth of more than one
(1)high-networth family; S.L. 370.34. "Notified PIF" means a notified professional investor fund established in accordance with the Investment Services Act (List of Notified CISs) Regulations; "professional qualifications" means relevant qualifications attested by evidence of education qualifications or, by way of derogation, when provided for by national law, attested by at least five
(5)years of 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. For the purpose of this definition: (a) "education qualification" means any evidence of formal qualifications issued by an educational establishment obtained after the successful completion of a post-secondary education programme, namely a set of courses provided by an educational establishment recognised as a education institution by the jurisdiction in which it is situated. An education qualification shall be taken into account with regard to the benefits conferred by these rules and article 56
(21)of the Act, provided that the relative course of studies needed to obtain such qualification was for a minimum period of at least three
(3)years; and (b) "professional experience" means the actual and lawful pursuit of the profession concerned; Cap. 331. "registered trustee" means a trustee which is registered with the competent authority in terms of article 43B of the Trusts and Trustees Act; "rights acquired under this law" means the right to elect to pay tax at the reduced rate of tax provided by article 56
(21)of the Act and these rules; "Single Family Office" means an undertaking that solely manages the wealth of a single high-net-worth family. Qualifying contracts and eligible offices. 3.
(1)Income from a qualifying contract of employment that qualifies for the purposes of these rules when it is received by a beneficiary and consists in income subject to tax in accordance with article 4
(1)(b) of the Act, excluding 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: SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX [ S.L. 123.218 3 Provided that the said minimum of sixty-five thousand euro (€65,000) shall be adjusted by an increase of ten thousand euro (€10,000) every five
(5)years with effect from the year subsequent to the year in which these rules come into force..
(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.
(3)The employments and offices which are eligible for the reduced rate of tax are listed in the Schedule. 4. A beneficiary is an individual who satisfies all of the following conditions: (a) he is an individual who derives income subject to tax under article 4
(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 with regard to any period spent outside Malta in relation to such work or duties, or on leave during the carrying out of such work or duties; (
- b)his first employment in Malta is in an eligible office under a contract of employment requiring the performance of his duties in Malta: Provided that the beneficiary shall not have had income referred to in article 4
(1)(
- a)and (
- b)of the Act before 1st January 2025. (
- c)he is protected as an employee in accordance with Maltese law, irrespective of the legal relationship between the employee and the employer, 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; (
- d)he proves to the satisfaction of the competent authority that he is in possession of the required professional qualifications; (
- e)he is not an individual who has benefited under article 6 of the Act; (
- f)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 who is related to his employer in respect of activities which are substantively derived from the employment covered by the Beneficiaries under these rules. 4 [ S.L. 123.218 SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX qualifying contract of employment as are chargeable to tax in Malta; (
- g)he proves to the satisfaction of the competent authority that he performs activities of an eligible office; (
- h)he proves to the satisfaction of the competent authority that: (
- i)he is in receipt of stable and regular resources which are sufficient to maintain himself and a family in Malta comparable to his without recourse to the social assistance system in Malta; (
- ii)he resides in accommodation regarded as normal in Malta for himself, and where he forms part of a family living in Malta, for a comparable family in Malta, and which satisfies the general health and safety standards in force in Malta; (iii) document; he is in possession of a valid travel (
- iv)he is in possession of private medical insurance in respect of all risks normally covered for Maltese nationals for himself and the members of his family, irrespective of who carries the burden of the cost of such insurance; and (
- v)he is not domiciled in Malta; and (
- i)such other conditions as may be deemed fit by the competent authority, including conditions in respect of training personnel in the field of expertise related to the relevant eligible office of the beneficiary. Application for eligibility. 5.
(1)An application for a formal determination relating to eligibility in accordance with these rules and article 56
(21)of the Act shall be made on such form or in such manner as the competent authority, in agreement with the Commissioner, may require and shall contain the information and documents therein requested: Provided that such an application may be made between 1st January 2025 and 31st December 2034: Provided further that no such application shall be accepted by the competent authority after 31st December 2035.
(2)Such application shall be submitted to the competent authority which shall process the application and issue a formal SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX [ S.L. 123.218 5 determination of eligibility under these rules and article 56
(21)of the Act or a refusal of the application, as the case may be, within a period of ninety
(90)days from receipt of the said application in such manner as the Commissioner shall determine.
(3)For the purpose of processing an application under these rules, the competent authority may require the applicant to produce, within the time indicated by it in such request, such further information and documents as they may consider necessary, including certifications and declarations of the employer of such individual. Where such a request is made, the period of ninety
(90)days referred to in sub-rule
(2)shall commence from date of receipt of the information requested.
(4)If an individual fails, without any valid reason, to fully comply with any request made by the competent authority in accordance with sub-rule
(3)within the period indicated in the said sub-rule, the competent authority shall refuse the application and inform the Commissioner of such refusal.
(5)Within the period referred to in sub-rule
(2)or
(3), as the case may be, the competent authority shall inform the Commissioner of such determination or refusal. The Commissioner shall endorse such determination or refusal and inform the applicant accordingly, in such manner as the Commissioner shall determine.
(6)The competent authority shall, on an annual basis, send a list of applications received and their status to the Commissioner. 6.
(1)Once a formal determination of eligibility has been issued by the competent authority in accordance with the provisions of rule 5, the option available in accordance with article 56
(21)of the Act may be exercised: Provided that such available option may not be exercised in respect of any year of assessment preceding the year of assessment 2026.
(2)The said option shall be exercised by means of a declaration signed by the beneficiary and endorsed by the competent authority made on such form publicly available on the apposite website or in such manner as the Commissioner may require. Such declaration shall specify the years of assessment in relation to which the exercise of the option relates.
(3)The said option shall not be deemed to have been validly exercised unless the income to which it applies has been fully and correctly declared in the 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. 6 [ S.L. 123.218 Time-frame during which benefits apply. SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX 7.
(1)The benefits under these rules and article 56
(21)of the Act shall apply in relation to employment income that is specified in rule 4(a), and that is earned during a period of five
(5)years which commences to run from the year in relation to which a formal determination was issued under the provisions of the rules and as formally determined under rule 5
(2): Provided that the option under article 56
(21)of the Act has been exercised as provided under the provisions of rule 6.
(2)Subject to the provisions of sub-rule
(3), any individual who benefits under the provisions of sub-rule
(1), upon submitting an application on such form or in such manner as the competent authority, in agreement with the Commissioner, may require, shall be eligible to two
(2)further extensions of five
(5)years for his qualifying period, subject to the continued adherence to the other provisions of these rules and article 56
(21)of the Act. Such application shall be made during the year before the end of the relevant five
(5)year qualifying period.
(3)Notwithstanding anything to the contrary contained in these rules and article 56
(21)of the Act, benefits under the provisions of these rules and article 56
(21)of the Act shall not apply in relation to income earned after 31st December
- Minimum amount chargeable to tax.
- 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 sixty five thousand euro (€65,000): Provided that the minimum amount of income of sixtyfive thousand euro (€65,000) shall be adjusted in line with the provisions of the proviso to rule 3
(1): Cap.
- Provided further that the rate of fifteen percent (15%) shall apply without the possibility to claim any relief, deduction, reduction, credit or set-off of any kind. Notwithstanding the generality of the foregoing, a beneficiary shall be allowed deductions of tax in accordance with article 23 of the Income Tax Management Act. Maximum amount of emoluments that may benefit under these rules
- When an individual exercises the option available under article 56
(21)of the Act in respect of a year of assessment, the rate of fifteen percent (15%) shall apply on an amount of emoluments payable not exceeding seven million euro (€7,000,000). Any emoluments payable in excess of the said amount of seven million euro (€7,000,000) shall constitute remaining income for the purposes of paragraph (a) of the proviso to article 56
(21)of the Act and consequently, the tax on such remaining income shall be calculated at the rate or rates that would have been applicable to that remaining SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX [ S.L. 123.218 income had the option not been exercised. 10.
(1)For the purpose of ascertaining an individual’s right to exercise the option referred to in article 56
(21)of the Act and ensuring the proper application of these rules and article 56
(21)of the Act, the Commissioner and, or the competent authority may require such individual to produce, within the period indicated by the Commissioner and, or the competent authority in that request, such further information and documents as they may consider necessary, including certifications and declarations of the employer in connection to such individual. Power to request information.
(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, or the competent authority in accordance with this rule, the Commissioner may order that article 56
(21)of the Act shall not apply to such income. In such a case, the Commissioner may carry out an assessment and the tax on such income shall be calculated at the rates provided for in the Act without any reference to article 56
(21)of the Act. Where an individual fails to produce the information requested solely by the competent authority’s request, the said competent authority shall inform the Commissioner without delay and in any case not later than thirty
(30)days of such failure. 11.
(1)Where any person, in order to obtain any benefits under these rules, makes use of artificial arrangements, the Commissioner shall, by order in writing, determine the amount of tax that such person has to pay, 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. Anti-abuse provisions.
(2)A person who disagrees with an order served upon him in accordance with sub-rule
(1)shall have the same rights to object to such order and to appeal from a decision of the Commissioner refusing that objection as if that order were an assessment issued in accordance with the Income Tax Management Act and the relevant provisions of that Act relating to objections and appeals shall apply mutatis mutandis. Cap.
- SCHEDULE (rules 2 and 3) Eligible offices Part I The following are the eligible offices with companies or other 7 8 [ S.L. 123.218 SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX undertakings referred to in Part II:
- Head of the Back Office and, or Chief Executive Officer, General Manager, Country Head, Managing Director or equivalent designation;
- Chief and, or Head Risk Officer;
- Chief and, or Head Compliance and Anti-Money Laundering Officer;
- Chief and, or Head Risk Officer, including Fraud and Investigations Officer;
- Portfolio Manager;
- Chief and, or Head Investment Officer;
- Senior Trader;
- Senior Structuring Professional. Part II Eligible offices shall be held with the following companies or other undertakings: (a) in the context of Single Family Offices: S.L. 370.
- (i) fund managers established in Malta which are exempt from the requirement for an investment services licence in terms of regulation 3
(1)(
- f)of the Investment Services Act (Exemption) Regulations, to the extent that the Notified PIF they manage is a family office vehicle which invests the private wealth of investors without raising external capital; S.L. 370.02. (
- ii)fund managers established in Malta which are exempt from the requirement for an investment services licence in terms of regulation 3
(1)(t) of the Investment Services Act (Exemption) Regulations, to the extent that the Notified PIF they manage is a family office vehicle which invests the private wealth of investors without raising external capital; S.L. 370.02. (iii) registered trustees which invest, on behalf of a family trust, inter alia in a Notified PIF which is managed by a fund manager which is exempt from the requirement for an investment services licence in terms of regulation 3
(1)(f) or regulation 3
(1)(
- t)of the Investment SENIOR EMPLOYEES OF FAMILY OFFICES, BACK OFFICES AND TREASURY MANAGEMENT OPERATIONS TAX [ S.L. 123.218 Services Act (Exemption) Regulations, to the extent that the Notified PIF they manage is a family office vehicle which invests the private wealth of investors without raising external capital; (
- iv)licence holders which invest the private wealth of investors without raising external capital. For the purposes of this paragraph, "licence holder" shall also include Notified PIFs; (
- b)in the context of Multi Family Offices, licence holders which invest the private wealth of investors without raising external capital; (
- c)undertakings carrying on Back Office services to the undertakings referred to in paragraphs (
- a)or (b), and confirmed as such in writing by the competent authority for the purposes of these rules; (
- d)undertakings carrying on Treasury Management operations to the undertakings referred to in paragraphs (
- a)or (b), and confirmed as such in writing by the competent authority for the purposes of these rules. 9