These rules shall apply only in respect of qualifying contributions made to a qualifying scheme (as a retirement scheme or a long-term contract of insurance that fulfils the requirements of these rules and which is approved by the Commissioner) by or on behalf of any individual who:
- derives employment income and who is duly registered for Maltese income tax purposes;
- is employed by the qualifying employer;
- does not benefit under the Highly Qualified Persons Rules
A qualifying employer is any person that employs individuals to carry out the economic activity for which it is established and which is registered as a payer for the purposes of the Final Settlement System Rules. A qualifying employer shall also include a self-occupied person.
Tax Credit - Contributions by a qualifying employer
A tax credit is applicable to the qualifying employer making qualifying contributions to a qualifying scheme for the benefit of one or more qualifying employees. The employer shall be entitled to a tax credit amounting to the lower of 15% of the amount of qualifying contribution paid during a year and €150 or such other amount as may be prescribed by the Minister from time to time.
A qualifying contribution made to a qualifying scheme approved by the Commissioner shall provide a tax deduction that can be claimed by the qualifying employer equivalent to the lower of the qualifying contribution actually paid and € 2,000.
Tax credit for a qualifying employee
A qualifying employee who also makes qualifying contributions into the qualifying scheme shall be eligible for a tax credit amounting to 15% of the aggregate amount of the qualifying contributions made during a year, up to a maximum of €150 or such other amount as may be prescribed by the Minister from time to time.
This tax credit shall only be available as a deduction for a qualifying employee for the year during which the qualifying contribution to the qualifying scheme/s is made. In the case of a qualifying employee who is married and is chargeable to tax jointly with his or her spouse, the said deduction may be availed of the income tax which is due on the total income of the married couple.
Any contributions or payments made by a qualifying employer for the benefit of a qualifying employee shall not be deemed to be a fringe benefit and therefore shall not be subject to tax.