Qualifying Employment in Innovation and Creativity Rules

The development and expansion of knowledge based industries requires the availability of human resources. Such resources may be developed through education and training, however such resources would need to be substantiated through knowledge and experience.

This measure facilitates employment of non- residents in roles which are currently not addressed by the local labour market by temporarily easing the tax expenses incurred by such persons through a fiscal incentive. Through Subsidiary Legislation 123.141, an individual may benefit from a flat income tax rate of 15% on employment income derived from an eligible office amounting to a minimum of €45,000. Income in excess of €5 million derived from this contract of employment will not be subject to tax in Malta.

An Eligible Office shall cover employment in a role directly engaged in:

  1. Industrial Research and Experimental Development insofar that the applicant is in possession of a post graduate degree in sciences or engineering that is applicable to the role. For the purpose of this measure:
    1. Industrial Research shall mean the carrying out (individually or as part of a team) planned research or critical investigation aimed at the acquisition of new knowledge and skills for developing new products, processes or services or for bringing about a significant improvement in existing products, processes or services. It comprises the creation of components parts of complex systems, and may include the construction of prototypes in a laboratory environment or in an environment with simulated interfaces to existing systems as well as of pilot lines, when necessary for the industrial research and notably for generic technology validation.
    2. Experimental Development shall mean acquiring, combining, shaping and using existing scientific, technological, business and other relevant knowledge and skills with the aim of developing new or improved products, processes or services. This may also include, for example, activities aiming at the conceptual definition, planning and documentation of new products, processes or services.
  2. Product development and product or process innovation insofar that the applicant is either in possession of post graduate degrees in sciences, engineering, design, creativity, product development, or art and that is applicable to the role or has demonstrated a minimum of (3) years experience as part of a team engaged in a similar role. For the purpose of this measure:
    1. Product development shall mean the detailed specification and development of new tangible products (include electronic products such as media and software products).
    2. Product or process innovation shall mean the implementation of significant improvements to tangible products (including electronic products such as media and software products) and industrial processes aimed to increases current capabilities including customisation and localisation.
  3. An Eligible Office shall also include Senior Management roles in so far that the person’s responsibility within the firm is directly related to creativity and innovation tasks described by (a) and (b) above. A Senior Management role entails that the applicant reports directly to the Board of Directors as should be specified in the contract of employment

This measure will be active until 31st December 2017. Applications received after the 30th November of any year will be processed in the following calendar year. Thus, if the applicant is deemed eligible the benefit may start to be claimed on income received in the following year.

Malta Enterprise may periodically review, update and amend these Guidelines.

Please contact us at info@johnhubermalta.com for more information.