Fiscal incentives for Senior Employees of Family Offices, Back Offices and Treasury Management Operations
- Sergio Montebello
- Oct 20
- 5 min read
On the 17th October 2025, a new optional fiscal incentive applicable to specific employment income was introduced through legal notice 250 of 2025: the Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules, 2025, providing for a reduced 15% tax rate on certain qualifying employment income. The rules apply with effect from year of assessment 2026 (income derived after 1st January 2025).
Beneficial tax rate
In order for a beneficiary to be able to opt for the flat tax rate of 15%, he must be deriving employment income from a qualifying contract of employment, amounting to a minimum remuneration (excluding fringe benefits) of €65,000. This threshold will increase by €10,000 every 5 years. However, the reduced rate is not available for qualifying income exceeding €7m, which is taxed on the excess at 35%. The 15% tax rate shall apply without the possibility to claim any relief, deduction, reduction, credit or set-off of any kind.
The reduced tax rate can be applied for a period of 5 years (starting from the year when the applicable qualifying determination is issued), but the beneficiary can apply for up to two further extensions of five years each of the scheme (subject to continued adherence to the conditions). However, benefits under the Rules shall apply only to employment income earned up to 31st December 2040.
Qualifying employment and offices
The employments and offices which are eligible for the reduced rate are as follows.
The following are the eligible offices with companies or other undertakings that would entitle the recipient to apply for the reduced rate:
1. Head of the Back Office and, or Chief Executive Officer, General Manager, Country Head, Managing Director or equivalent designation;
2. Chief and, or Head Risk Officer;
3. Chief and, or Head Compliance and Anti-Money Laundering Officer;
4. Chief and, or Head Risk Officer, including Fraud and Investigations Officer;
5. Portfolio Manager;
6. Chief and, or Head Investment Officer;
7. Senior Trader;
8. Senior Structuring Professional.
Eligible offices shall be held with the following companies or other undertakings:
(a) in the context of Single Family Offices:
fund managers established in Malta which are exempt from the requirement for an investment services licence in terms of regulation 3(1)(f) or regulation 3(1)(t) of the Investment Services Act (Exemption) Regulations, to the extent that the Notified PIF they manage is a family office vehicle which invests the private wealth of investors without raising external capital;
registered trustees which invest, on behalf of a family trust, inter alia in a Notified PIF which is managed by a fund manager which is exempt from the requirement for an investment services licence in terms of regulation3(1)(f) or regulation 3(1)(t) of the Investment Services Act(Exemption) Regulations, to the extent that the Notified PIF they manage is a family office vehicle which invests the private wealth of investors without raising external capital;
licence holders which invest the private wealth of investors without raising external capital. For the purposes of this paragraph, "licence holder" shall also include Notified PIFs;
(b) in the context of Multi Family Offices, licence holders which invest the private wealth of investors without raising external capital;
(c) undertakings carrying on Back Office services to the undertakings referred to in paragraphs (a) or (b), and confirmed as such in writing by the competent authority for the purposes of these rules;
(d) undertakings carrying on Treasury Management operations to the undertakings referred to in paragraphs (a) or(b) and confirmed as such in writing by the competent authority for the purposes of these rules.
Conditions
A beneficiary must satisfy all of the following conditions:
(a) the individual derives employment income under a qualifying contract of employment, and received in respect of work or duties carried out in Malta, or with regard to any period spent outside Malta in relation to such work or duties, or on leave during the carrying out of such work or duties;
(b) the employment in Malta is in an eligible office under a contract of employment requiring the performance of duties in Malta. Moreover, the beneficiary shall not have had income referred to in article 4(1)(a) (trading/business income) and (b) (employment income) of the Income Tax Act before 1st January 2025.
(c) the individual is protected as an employee in accordance with Maltese law, irrespective of the legal relationship between the employee and the employer, for the purpose of exercising genuine and effective work for, or under the direction of someone else, is paid, and has the required adequate and specific competence, as proven to the satisfaction of the competent authority (MFSA);
(d) he proves to the satisfaction of the competent authority that he is in possession of the required professional qualifications (relevant qualifications attested by evidence of education qualifications or, by way of derogation, when provided for by national law, attested by at least five (5) years of professional experience of a level comparable to education qualifications and which is relevant in the profession or sector specified in the work contract or binding job offer)
(e) he is not an individual who has benefited from the exemption from tax on certain fringe benefits in terms of Article 6 of the Income Tax Act;
(f) the employee 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 who is related to his employer in respect of activities which are substantively derived from the employment covered by the qualifying contract of employment as are chargeable to tax in Malta;
(g) he proves to the satisfaction of the competent authority that he performs activities of an eligible office;
(h) he proves to the satisfaction of the competent authority that:
he is in receipt of stable and regular resources which are sufficient to maintain himself and a family in Malta comparable to his without recourse to the social assistance system in Malta;
he resides in accommodation regarded as normal in Malta for himself, and where he forms part of a family living in Malta, for a comparable family in Malta, and which satisfies the general health and safety standard sin force in Malta;
he is in possession of a valid travel document;
he is in possession of private medical insurance in respect of all risks normally covered for Maltese nationals for himself and the members of his family, irrespective of who carries the burden of the cost of such insurance; and
he is not domiciled in Malta; and
such other conditions as may be deemed fit by the competent authority, including conditions in respect of training personnel in the field of expertise related to the relevant eligible office of the beneficiary.
Anti-abuse provisions
If a person, in order to obtain any benefits under the rules, makes use of artificial arrangements, the Commissioner shall, by order in writing, determine the amount of tax that such person has to pay, for any year of assessment, in such manner and in such amount as may be necessary, in the circumstances of the case to nullify benefits obtained under these rules. In the context of the Rules, an agreement is deemed to be artificial if:
(a) a beneficiary receives any benefit or payment, in whatever form, from a person who is related to his employer and such beneficiary does not declare for tax purposes such benefit or payment in Malta or is not liable to tax on such income in Malta; or
(b) arrangements of collusion between employer and employee to ensure that a contract which in substance does not fall within the scope of the rules, would be given a form which enables it to qualify for benefits hereunder.
Get in Touch:
Josef Mercieca
jmercieca@quazar.mt / +356 2388 4600
