Healthcare exemptions; EU small business VAT registration threshold; Small Enterprise changes
As part of its ongoing alignment with EU VAT reforms and national modernisation efforts, Malta introduced several significant VAT updates in 2025. Here’s a summary of the most important developments businesses should be aware of.
See more background in our Malta VAT guide.
VAT Exemptions for Healthcare Products
Effective from 1 January 2025, Malta introduced new VAT exemptions (with the right to deduct input VAT) for a targeted list of healthcare-related items. This move was formalized through Act No. XXXVIII/2024, published on 17 December 2024.
The exemptions apply to the following products:
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Female sanitary products
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Medical accessories for cancer patients
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Devices for managing urinary incontinence
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Vacuum constriction devices
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Scalp cooling systems
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Supportive medical undergarments
These changes aim to reduce the financial burden on patients and improve access to essential health-related goods.
Implementation of the EU Small Business (SME) VAT Scheme
Starting 1 January 2025, Malta adopted the EU’s optional SME VAT scheme, designed to simplify compliance for small businesses operating across borders within the EU.
Key features include:
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Businesses with EU-wide turnover under €100,000 and domestic turnover under €35,000 can opt for VAT exemption in Malta or other EU Member States.
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This scheme streamlines VAT obligations for micro and small enterprises engaging in cross-border trade.
The adoption of this scheme reflects Malta’s commitment to fostering a more business-friendly VAT environment for smaller operators.
Updated Rules for “Small Undertakings” (Article 11)
Alongside the SME scheme, Malta updated the rules defining “small undertakings” under Article 11 of its VAT legislation. These changes also took effect on 1 January 2025:
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The turnover threshold for small undertakings remains at €35,000, but now includes certain previously exempt supplies, such as:
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Immovable property transactions
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Financial services
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Insurance-related supplies
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This expanded definition of turnover means that some businesses may exceed the threshold sooner and lose their exemption status.
In addition, updated VAT registration guidelines, issued on 7 April 2025, clarified key procedural details:
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VAT registration under Article 11 becomes effective from the first day of the month in which the application is submitted.
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Retroactive application is not permitted, ensuring a more predictable timeline for new registrants.
