The Highly Qualified Persons Rules 2011 (“the Rules”) enacted by means of Legal Notice 106 published in March 2011 but with retrospective effect as of tax basis year starting 1 January 2010, prescribe a preferential income tax bracket to a number of highly qualified professionals.

Malta already is a leading jurisdiction in the internet gambling industry and these rules should help the jurisdiction to sustain the growth that it has managed achieved so far thanks to its finely tuned balance of business friendliness and regulatory rigour.

Highly Qualified Gaming Executives

The objective of these new personal tax rules is the creation of a scheme to attract highly qualified persons to Malta and have now been extended to “eligible offices” with companies licensed and/or recognised by the Malta Lotteries and Gaming Authority (LGA).

Malta recently introduced an attractive 15% flat rate of tax for individuals working in the financial services sector who can meet a number of requirements specificied in the relevant legal notice. This measure was introduced in response to the growth which the Maltese financial services sector, which has seen rapid growth in the context of hedge funds, FOREX businesses, captives and other areas, has registered over the last few years. This measure is now being extended to cover the country's well established internet gambling industry.

Malta Taxation of Gaming Executives

New Personal Tax Band at 15%

The 15% tax rate will now therefore apply also to individuals drawing income from employment with companies that are licensed with the Lotteries and Gaming Authority and having a minimum income of Euro75,000, as adjusted annually in line with the Retail Price Index.

Gaming Employment Income Over Euro5m

Income in excess of five million Euro is exempt from tax in Malta under the Rules.

Gaming Tax Scheme Eligibility Rules

Eligible Top Management Positions at Gaming Companies

A number of qualifying i-Gaming specific roles have been introduced into the legislation, namely:

• Actuarial Professional,
• Chief Executive Officer;
• Chief Financial Officer;
• Chief Commercial Officer
• Chief Operations Officer;
• Chief Risk Officer (including Fraud and Investigations Officer);
• Chief Technology Officer;
• Head of Investor Relations;
• Head of Marketing (including Head of Distribution Channels);
• Head of Research and Development; (including Search Engine Optimisation and Systems Architecture)
• Senior Analyst (including Structuring Professional);
• Senior Trader/Trader.
• Odds Compiler Specialist

Non-Malta Domiciled Status

For eligibility under these rules, applicants must not be domiciled in Malta.

Qualifying Contracts of Employment

The preferential tax rate applies to an individual who satisfies all of the following conditions of employment:

1. derives employment income subject to Malta income tax;
2. employment contract is subject to the laws of Malta and proves to the satisfaction of the Lottries and Gaming Authority that the contract is drawn up for exercising genuine and effective work in Malta;
3. proves to the satisfaction of the Lotteries and Gaming Authority that he is in possession of professional qualifications and has at least five years professional experience;
4. has not benefitted from deductions available to investment services expatriates with respect to relocation costs and other deductions (Article 6, Income Tax Act);
5. 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. proves to the satisfaction of the Lotteries and Gaming Authority that he performs activities of an eligible office; and
7. proves that:
8. 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. 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;
10. he is in possession of a valid travel document;
11. 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.

Exclusions

Important exlusions apply and candidates are encouraged to seek professional advice to avoid punitive rules applicable in case an ineligible applicant obtains benefits under this personal tax scheme.