Crew working on-board a vessel flying the Malta flag can become residents in Malta as “highly qualified persons” and as a Malta tax payer they are eligible to benefit from the reduced income tax rate applicable to this type of qualifying employment.
You will find the main requirements for Maltese residence for seafarers, summarised by Rosemont Yacht Services.
Who is concerned?
All persons meeting these criteria are eligible for tax residence in Malta:
- be employed to an eligible employment or in an eligible office; (see below)
- be entitled to remuneration of at least €65,000 (exclusive of the annual value of any fringe benefits) in terms of a contract of employment;
- reside in accommodation regarded as normal for a comparable family in Malta;
- not be domiciled in Malta;
- be in possession of a valid travel document;
- be in possession of adequate health insurance;
- does not benefit under any alternative incentives available in Malta;
- has signed a Qualifying Contract* of Employment.
What is the tax rate applied in Malta?
The rules provide for a beneficial tax rate of 15% on the qualifying employment (derived from an eligible office) income of €65,000 (excluding fringe benefits).
This results in a minimum annual tax of €9,750 without the possibility to claim any relief, deduction, credit or set off of any kind.
How long does this rate apply?
The beneficial tax rate is available for a period of 5 years for EEA and Swiss nationals and for a period of 4 years for third country nationals. It can be renewed for a further 5 years and 4 years respectively.
What are the employment and offices eligible?
Eligible employment includes the following positions :
- Maritime Activities
- Chief Executive Officer
- Chief Operations Officer
- Managing Director
- Chief Financial Officer
- General Manager
- Crewing Manager
- Technical Manager
- Technical Ship Superintendent
- Designated Person Ashore
- Master
- Chief Mate
- Second Officer
- Chief Engineer
- Second Engineer
- Chef
An eligible office is an employment included in the list above and which is held with any of 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
- 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; or
- which carries on mainly a trade or business consisting in the Servicing of the offshore oil and gas and ancillary services industry.
*A qualifying contract of employment is subject to the laws of Malta and derives employment income subject to income tax in Malta. The applicant must proves to the satisfaction of the Authority for Transport in Malta that 1) the qualifying contract is drawn up for exercising genuine and effective work in Malta, 2)that he is in possession of professional qualifications and has professional experience, and 3)that he performs activities of an Eligible Employment and Office.
The applicant must also 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.
03/2021