Returning to Work After Maternity Leave – Tax Rebates

Returning to work after having a child is a significant decision for many women in Malta. While the standard 18-week maternity leave period provides essential time for recovery and bonding, many mothers face financial and professional pressures that lead them to return to work sooner than they would ideally prefer.

To support women re-entering employment after childbirth, Malta offers a specific tax rebate system administered through the RA7 and RA9 forms. These mechanisms are designed to reduce or reimburse the income tax paid in the first year a mother returns to work. Understanding how these schemes function and who qualifies ensures that eligible mothers do not miss out on financial support intended for their benefit.

Maternity Leave Structure in Malta

Under Maltese employment law, maternity leave consists of 18 uninterrupted weeks, structured as follows:

• 14 weeks fully paid by the employer, based on the employee’s basic wage;
• 4 additional weeks unpaid by the employer, but covered through a government maternity benefit – if mother decides to extend;
• At least 6 weeks must be taken after childbirth, while the remaining period may be taken before or after the birth depending on agreement with the employer.

Once maternity leave ends, a mother is required by law to remain in employment for six months if she has received employer-paid maternity leave. Leaving earlier may require repayment of the employer’s portion of maternity pay.

This six-month obligation relates to employment law, not to the tax credit itself.

The Tax Credit for Women Returning to Work

Malta’s tax system offers a meaningful incentive for women who return to employment after childbirth. The tax credit for women returning to work operates in two primary ways:

1. A tax credit of up to €2,000, used against income tax over one or two years
2. A tax exemption equal to the income tax paid in the year of return, capped at €5,000

The calculation depends on the tax actually paid:

• If the total tax due in the year of return is below €2,000, the mother may receive a €2,000 credit applied over one or two assessment years
• If the tax due exceeds €2,000, she may claim a full exemption of the tax paid, up to €5,000

This means many mothers recover all or part of the income tax they paid in the first year after resuming employment.

RA7 and RA9: Understanding the Forms

The tax credit is administered through two key forms: RA7 and RA9, each targeting individuals returning to the workforce after extended periods away from employment. Form RA7, Tax Credit for Persons Returning to Employment, applies to individuals who have been absent from formal employment for at least five years and provides a €2,000 tax credit upon their return. Form RA9 is specifically designed for women re-entering the labour market after childbirth. It applies to mothers who have a child under the age of 16 and who either returned to work after a career break of five years or more, or had a child on or after 1 January 2007 and continued or resumed employment thereafter. Together, these forms aim to support reintegration into the workforce and ease the financial transition back into employment.

RA9 is the form most commonly relevant to mothers returning from maternity leave, as it allows access to the full refund or exemption up to €5,000.

Do You Need to Work for a Full Year to Qualify?

A common misconception is that a woman must work one full year after maternity leave to qualify for the tax rebate.

The legal and tax framework shows otherwise:

• The tax credit does not specify a one-year minimum
• What matters is that the mother returns to gainful employment, pays income tax in that year, and meets the conditions set out in RA7 or RA9
• The only formal employment requirement linked to maternity leave is the six-month post-return obligation related to employer-paid maternity leave

In practice, the rebate is linked to tax paid in the year of return rather than the exact duration of employment.

How and When the Forms Are Issued

The process normally works as follows:

Rebates are then applied through reduced assessments, refunds or credits carried forward.

Practical Examples

Below are simple examples to illustrate the rebate:

This support can significantly ease financial pressure during the early childcare period.

Eligibility for Non-Maltese Mothers

Eligibility for non-Maltese mothers, both EU/non EU is determined by:

• Tax residence in Malta
• Employment or self-employment carried out in Malta
• Payment of local social security contributions
• Meeting the conditions of RA7 or RA9

Citizenship is not the main factor. For non-EU nationals, work permit conditions and residency rules may also need to be considered.

Practical Checklist for Returning Mothers

Final Notes

Malta’s tax rebate for women returning to work is an important financial support mechanism for working families. Eligible mothers may recover up to €5,000 in tax or obtain a €2,000 credit spread over two years. Because the rules are detailed and each case is different, personalised advice is recommended.

If you’re seeking clarity and support in managing your tax affairs in Malta, consulting with professionals might be your first step towards a more informed and beneficial financial journey. Contact us and book your initial consultation.

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