Malta's newly elected MEPs will make savings of around €10,000 per year in tax after the government decided that they should not be taxed at the rates imposed by their home country, The Sunday Times has learnt.
The government decided before the European Parliament election that MEPs should be taxed at the same rate as other Maltese appointees at EU institutions - to ensure they are all treated equally.
European Commissioner Joe Borg, judges Anthony Borg Barthet and Ena Cremona who sit on the European Court of Justice, and former minister Josef Bonnici who occupies Malta's post at the European Court of Auditors, currently pay EU taxes on their salaries.
However, these post-holders must live in Brussels whereas MEPs are able to commute between their home country and the Belgian capital.
Following the entrance into force of a new MEP statute next month, when the first session of the new EP legislature will be held in Strasbourg, Maltese MEPs will be paid a gross monthly salary of €7,665. This is a 540 per cent increase on the €1,295 monthly they used to receive under the previous legislature's terms.
In the past legislature, the five Maltese MEPs were subjected to the 35 per cent income tax on their salaries imposed by Malta's tax regime on higher earners.
However, the latest move means that just 22.2 per cent will be deducted from their salaries, and this will go straight into the EU's pocket rather than the local coffers.
The country will still make a saving as it will no longer be paying MEPs' salaries. They will instead be paid directly from the EU's budget.
Apart from their handsome new salary, MEPs will be receiving more than €300,000 each annually in allowances as subsistence for accommodation and meals, office management, travel and salaries for hiring personnel and consultants.
These allowances are non-taxable and some of them will be paid directly by the EP to the MEPs' hired staff in order to prevent abuse of the system.
Some EU member states decided against allowing their MEPs to pay taxes at EU rates. These include the UK, France, the Netherlands, Finland and Cyprus.
Belgium, Italy, Hungary and Lithuania have opted for the same system as Malta.
A spokesman for the EP said: "Member states had to choose what to do and some decided that they will still impose their own taxes on MEP salaries to (bring) the elected representatives (on a) par with their 'common' citizens."