Article 56 (17) of the Income Tax Act gives the option to an employee to apply the 15% rate on emoluments payable for the performance of work or duties mainly outside Malta under an employment contract which is for a period of at least 12 months or lasts at least 12 months.
Such income shall be deemed to constitute the first part of the individual's total income for that year. The employee must not be present in Malta for a period or periods that in aggregate amount to more than 30 days excluding any period during which an individual was present in Malta on vacation leave or sick leave or any period preceding the commencement or the termination of the contract.
The 30-day period for the purpose of this provision has given rise to various interpretations. The Commissioner for Revenue has now clarified the issue of presence in Malta in calculating the 30-day period and it is now confirmed that presence in Malta under the following scenarios will be treated as if the employee were in Malta on vacation and therefore the period in question will be disregarded:
- An employee works on a shift basis abroad and stays in Malta between shifts.
- An employee works 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.
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