Clarification on the taxation of income relating to employment exercised abroad – calculating the 30-day period of presence in Malta
BACKGROUND – Article 56(17) of Malta’s Income Tax Act provides a potentially favourable tax rate of 15% on income derived from employment exercised outside of Malta. The reduced rate of tax applies to employment income and certain specific conditions and restrictions apply.
UPDATE – Borg Galea & Associates would like to inform our clients that one of the conditions for the applicability of such proviso is that during the relevant year the employee is not present in Malta for a period or periods that in aggregate exceed 30 days. In calculating the 30-day period, presence in Malta on vacation leave or sick leave is to be disregarded. Moreover, presence in Malta in the following scenarios will be treated as if the employee were in Malta on vacation leave and will therefore also be disregarded:
- an employee works abroad on a shift basis and stays in Malta in between shifts;
- an employee works abroad on a time-on / time-off basis and stays in Malta during the time-off periods;
- an employee works regularly abroad and stays in Malta during weekends and public holidays.
For more information on the taxation of income relating to employment exercised abroad, kindly contact us at: +356 2703 7012 or send an email to hili@borggalea.com.
