7th September 2014
As part of the process to maintain good communication with our members and discuss the new tax measures being charged to footballers as from the 1st January 2014, a meeting was held between the MFPA and the Inland Revenue Department. We are pleased to report that this was a very positive meeting where mainly the new tax rate of 7.5%, which is to be charged on all football income earned by footballers, was discussed together with the procedures relating its implementation.
The measure is intended to regularise the tax position of players and we strongly welcome all members to adhere to this new opportunity. It gives all peace of mind and certainty and hence MFPA will make an effort to ensure this measure is applied. Not using this measure correctly will mean that any football income is added to player’s income and taxed at the standard rates.
The following are the main points regarding this new measure:
Unfortunately a salary capping still exists for both full-time and part-time football players. This was introduced in the early nineties and does not reflect today’s reality. In fact a part-time player playing in the Maltese Premier League can only earn a maximum gross salary of €350 per month while a full-time player can earn a maximum gross salary of €1200. The MFA President Mr. Norman Darmanin Demajo on the 11th of November 2013 stated that a committee has been set up within the MFA to review the outdated regulations and eventually change them. We still await a meeting with such committee.
The Malta Football Players Association is advocating a complete removal of the ceilings so that players can have a transparent agreement with clubs. The MFPA strongly recommends to all players to declare all income on the contracts to ensure their respect. This new tax measure provides for a very advantageous level of taxation on all such income so we encourage players to adhere to the same and indicate all income to be paid by clubs, even if for now is indicated as an allowance over and above the salary cap.
It is interesting to note that a salary capping existed also in England over 50 years ago. However on the 18th of January 1961 the salary capping for professional football players was abolished when the threat of a strike by professional footballer on January 14th 1961 effectively forced the Football League to abolish the maximum wage.
Do not hesitate to contact MPFA for further information.