Fiscal Incentives for Senior Employees of Family Offices, Back Offices and Treasury Management Operations

Purpose and Scope

The new framework provides clarity and consistency for employers and employees operating in these specialised sectors. It recognises the importance of senior management roles within private investment structures and financial management operations, offering a 15% flat tax rate on income derived from qualifying employment in Malta.

This incentive applies only to individuals who occupy designated senior positions; such as Head of Back Office, Head of Risk, Portfolio Manager, or Senior Trader, and who are employed within an approved family-office, back-office, or treasury management entity operating in or from Malta.

Main Conditions for Eligibility

 To benefit from the preferential 15% rate, a number of requirements must be satisfied:

• Minimum remuneration of €65,000 per annum (excluding fringe benefits). This threshold will increase by €10,000 every five years.
• Employment income must be derived from work performed in Malta (including duties carried out abroad that are directly connected to the Maltese role).
• The employee must possess a recognised qualification or at least five years of relevant experience.
• The individual must reside in Malta, maintain suitable accommodation, hold private health insurance, and demonstrate adequate financial resources.
• The employee must not be domiciled in Malta and must not have derived business or employment income in Malta prior to 1 January 2025.
• The employer must operate within the defined scope of a family office, back-office or treasury management activity as recognised under the Rules.

The scheme applies for an initial five-year period, with the possibility of two further five-year extensions, provided that all conditions continue to be met. Employment income exceeding €7 million will remain taxable at the standard 35% rate on the excess amount.

Compliance and Anti-Abuse Measures

The Rules include safeguards to ensure the regime is not misused. Where the Commissioner for Tax and Customs determines that arrangements have been made artificially to obtain a tax advantage, the benefit may be denied, and standard income tax rates will apply.

Accordingly, employers are advised to maintain clear documentation confirming the employee’s role, remuneration structure, and compliance with all eligibility criteria.

Practical Considerations 

For employers, the introduction of these Rules represents an opportunity to strengthen Malta’s competitiveness as a hub for private wealth, investment, and financial management operations. Organisations should assess whether their senior staff qualify under the new framework and review internal employment structures to align with the legislative requirements.

For employees, the regime offers a valuable fiscal incentive and legal clarity when considering relocation or senior appointments in Malta. Professional advice should be sought to ensure proper election and compliance under the scheme.

Conclusion

The Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules provide a clear and competitive tax pathway for high-level professionals within Malta’s financial ecosystem. These Rules strengthen Malta’s appeal as a jurisdiction for family office and treasury operations — promoting both talent retention and sustainable sectoral growth.

For further details or tailored guidance on how these Rules may apply to your organisation, kindly contact our tax team at directtaxation@bdo.com.mt.

 

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