TAX CREDIT (HIGHER EDUCATIONAL QUALIFICATIONS) RULES

QUALIFICATIONS)

SUBSIDIARY LEGISLATION 123.180

TAX CREDIT (HIGHER EDUCATIONAL

QUALIFICATIONS) RULES

10th April, 2018

LEGAL NOTICE 114 of 2018, as amended by Act XXIX of 2019 and

Legal Notices 286 of 2021 and 79 of 2026.

The title of these rules is the Tax Credit (Higher

Educational Qualifications) Rules.

(1)

In these rules, unless the context requires

otherwise -

"the Act" means the Income Tax Act;

"Corporation" means the Malta Enterprise established in terms

of the Malta Enterprise Act;

"MQF 7 qualification" and "MQF 8 qualification" mean an

educational qualification that, in terms of the Education Act or of the

Mutual Recognition of Qualifications Act, is classified as, or is

recognised as being equivalent to, a Level 7 or a Level 8 qualification,

respectively, under the Malta Qualifications Framework;

"relevant qualification" is a qualification that satisfies all the

following conditions

(a)

it is an MQF 7 qualification or an MQF 8

qualification;

(b)

it is awarded following the successful completion

of a course or programme of studies that is

completed on or after 1 January 2018;

(c)

it is awarded to an individual who had not

completed forty years of age on the date of the

commencement of the course or programme of

studies in question;

(d)

where the individual is employed in a professional

capacity the qualification was not obtained in

fulfilment or part-fulfilment of the conditions

which he had to satisfy in order to be able to

exercise that profession. For the purpose of this

paragraph, a profession means an occupation that

can only be held by individuals who are in

possession of defined academic qualifications.

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(2)

An individual shall not be deemed to be in a whole-time

employment unless he is a whole-time employee or a whole-time

employee with reduced hours as defined in the Employment and

Industrial Relations Act and actually performs services under an

employer-employee engagement that has been notified to the

Corporation set up in terms of the Employment and Services Act.

(1)

Subject to the other provisions of these rules, an

individual who is in possession of a relevant qualification and who

derives income from a whole-time employment and performs his

services wholly or mainly in Malta may claim a tax credit to be

determined in accordance with these rules.

(2)

A claim for a tax credit under these rules shall be made

for the year or each year of assessment for which that credit is due on

such form and in such manner as the Commissioner and, or the

Corporation may determine. The individual making the claim shall

provide the details mentioned below together with any other

information that may be requested in the said form

(a)

the description of the qualification that has been

awarded;

(b)

the name of the educational establishment that

awarded it;

(c)

the date of the commencement and the date of the

successful completion of the course or programme

of studies in question.

(3)

The Commissioner and, or the Corporation may request

the person who claims the tax credit to produce confirmation in writing

by the educational establishment that conducted the course or

programme of studies in question of the information referred to in sub-

rule (2) and to produce confirmation in writing by the relevant

authority that the qualification is or has been recognised as equivalent

to a Level 7 or a Level 8 qualification under the Malta Qualifications

Framework in terms of the Education Act or the Mutual Recognition of

Qualifications Act.

(1)

When the relevant qualification is an MQF 7

qualification, the tax credit shall be allowed against the tax on the

income derived during the year immediately following the year in

which the course or programme of studies in question was successfully

completed.

(2)

When the relevant qualification is an MQF 8

qualification, the tax credit shall be allowed against the tax on the

income derived during the two years immediately following the year in

which the course or programme of studies in question was successfully

completed.

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(3)

Notwithstanding the provisions of sub-rule (2), when the

relevant qualification is an MQF 8 qualification and the individual had

previously obtained an MQF 7 qualification and availed himself of a

tax credit in accordance with these rules in respect of that previous

qualification, the tax credit in respect of the MQF 8 qualification shall

be allowed to him only for the year of assessment commencing on the

1st January of the year immediately following that in which the course

or programme of studies leading to the MQF 8 qualification was

successfully completed.

(4)

Except as provided in sub-rule (3), a tax credit under

these rules shall be allowable only in respect of one relevant

qualification.

Where an individual benefits or has benefited from any

tax benefit or any form of financial assistance from the Government or

any government agency in terms of any law and the condition or one

of the conditions for the entitlement to that benefit or assistance is or

was the attainment of an educational qualification by that or any other

individual, no tax credit shall be allowable under these rules in respect

of that same qualification.

(1)

When the individual has obtained the relevant

qualification upon the completion of a course or programme of studies

on a full-time basis that commenced in 2017 or later, the tax credit

shall be in an amount equivalent to the tax chargeable for the year of

assessment in question on the income from his whole-time

employment. When the income from the whole-time employment

exceeds €60,000, the tax credit for that year shall be calculated as if

the said income was €60,000.

(2)

When the individual has obtained the relevant

qualification upon the completion of a course or programme of studies

on a full-time basis that commenced before 2017, the tax credit shall

be equivalent to -

(A - 2017) / (A - B) x C

where

A =

the year in which the course or programme of studies

is successfully completed

B =

the year in which the course or programme of studies

commenced

C =

the amount calculated in accordance with sub-rule (1)

(3)

When the individual has obtained the relevant

qualification upon the completion of a course or programme of studies

on a part-time basis, the tax credit shall be equivalent to fifty percent

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of the amount calculated in accordance with sub-rule (1) or sub-rule

(2), as the case may be.

(4)

For the purpose of this rule, the income from the whole-

time employment shall be deemed to be the first part of the individual’s

chargeable income for the respective year of assessment.

(1)

The tax credit under these rules shall be allowed on

condition that the individual remains continuously in whole-time

employment and continues to perform his services wholly or mainly in

Malta up to the end of the fourth year, or, in the case to which rule 4(2)

applies, the fifth year following the year in which the course or

programme of studies in question was successfully completed.

(2)

Any individual to whom a tax credit is allowed under

these rules and who is in breach of the condition set out in this rule

shall refund to the Commissioner an amount equal the tax credit with

interest at the rate determined in accordance with the Income Tax (Rate

of Interest) Rules running from the date on which that condition is

breached. No interest shall be chargeable if the individual informs the

Commissioner in writing about the breach of the condition within four

months and effects the refund within twelve months from the date of

the breach of the condition.

(3)

Sub-rule (2) shall be without prejudice to the liability of

any person arising in terms of any provision of the Income Tax Acts for

an omission from a tax return, sohowever that the breach of the

condition set out in this rule shall not, of itself, be treated as an

omission.

(4)

An individual whose employment is terminated or who

does not remain in whole-time employment shall not be treated to be in

breach of the condition set out in this rule if -

(a)

he takes up whole-time employment in Malta again

within three months; or

(b)

his whole-time employment is terminated on

account of certified sickness or injury.

These rules shall apply

(a)

to courses commencing before 1st January 2026;

and

(b)

if the individual who has commenced the course or

programme of studies leading to a relevant

qualification submits an application to the

Corporation declaring the intention of benefitting

from these rules by 31st December 2026 and

provide the required documentation to confirm the

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attainment of the relevant qualification by 31st

December 2030.