VAT compliance and reporting rules in Malta 2024
Below is summary of the major rules provided under Maltese VAT rules (Value Added Tax Act (Act XXIII of 1998)), plus adoption of EU VAT Directive provisions. Check our country VAT guides for other jurisdictions.
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Malta VAT country guide
| Highlights | Local term | Att dwar it-Taxxa fuq il-Valur Mizjud ('VAT') |
| VAT Rates - standard | 18% | |
| VAT Rates - reduced | 12%: 7%; 5%; 0% | |
| VAT news | Malta introduces 12% rate | |
| VAT number format | MT 12345678 | |
| Registration threshold | Goods: €35,000; other €30,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000 | |
| VAT Group | Permitted but limited to financial regulated sector | |
| VAT recovery foreign businesses | Permitted. For non-EU, reciprocity agreement is required (however, not usually enforced) | |
| Fiscal Representative | Not required of non-EU businesses although Commissioner reserves right to impose obligation | |
| Currency | Euro €, January 2008 | |
| Administration | Introduction | Malta introduced VAT in January 1999. It joined the European Union in May 2004. |
| VAT laws | Value Added Tax Act (Act XXIII of 1998). Also EU VAT Directive which takes supremacy as part of EU membership | |
| Tax Authorities | Commissioner for Revenue and Ministry of Finance | |
| VAT Rates | Standard rate | 18% |
| Reduced rates | 12% pleasure boat hire, certain health services and other; 7%: Licensed hotel accommodation; sports events and related services (eg gyms). 5%: domestic electricity; medical supplies; labour intensive supplies (repairs; domestic cleaning); works of art; print and electronic equivalent; confectionery | |
| Zero-rated | Intra-community passenger travel by air and sea; Food; pharmaceuticals; Exports and intra-community supplies of goods; gold to central banks; services related to vessels and aircraft | |
| Exempt | Education; financial services; health, hospital, and social welfare; water; public postal; letting immovable property; betting and gambling; welfare services; international passenger transport; certain copyrights | |
| Scope of VAT | Scope of VAT | Provision of domestic taxable goods and services; EU imports; intra-community acquisitions; Distance selling of goods B2C (OSS or IOSS); receipt of services or goods via the reverse charge |
| Time of supply | Goods & Services (general rule) | Goods date of delivery or made available to the consumer. For services, the date of provision. If invoice or payment is made before this, then this become the tax point. In all cases, tax point latest 15th of the month following the delivery or provision of the taxable supply. |
| Reverse Charge | General rule; latest by 15th of the month following month of supply | |
| Continuous Services | Dates of payment per contract. If greater than twelve months, the tax point at year end if no invoice raised or payment made. | |
| Imports | Time of clearance into free circulation in Malta, including release from bonded warehouse. | |
| Goods on approval and return | General rule. Once goods delivered or made available | |
| Registration | VAT registration threshold | Goods: €35,000; other €30,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000 |
| Voluntary VAT registration | Permitted for resident businesses only | |
| VAT number format | MT 12345678 | |
| VAT Group | Permitted for related (organisational; economic; economic) businesses to file via single consolidated VAT return. Limited to financial regulated businesses (at least one member of the group should be regulated). Only resident participants. | |
| Non-residents | Permitted. Non-EU may require Fiscal Representative | |
| Fiscal Representative | Not required of non-EU businesses although Commissioner reserves right to impose obligation. The Fiscal Representative is jointly and severally liable for their client's VAT. | |
| Digital Services | Malta participates in the EU single One Stop Shop (OSS) VAT return for digital, telecoms and broadcast services. This was formerly the MOSS regime until 30 June 2021 | |
| Pre VAT registration costs | Not generally permitted as require valid VAT invoice with customer's VAT number already in place | |
| VAT Invoices | Issuance | 15th of the month following the tax point (supply or payment). Invoices not required for retail transactions. However, approved point-of-sale, certified cash registers or tax office pre-numbers invoices must be used. |
| Content | Date; unique sequential invoice number; name and address of supplier and customer; Customer VAT number for intra-community supplies or reverse charge; date of supply or advance payment if different from invoice date; Description, quantity or units etc of supply of goods or services; price per unit; taxable amount; VAT charged; rate (broken out if supplies at different rates); total; explanation if zero-rated supply. | |
| E-invoices | Permitted with agreement of customer. In accordance with EU e-invoice Directive EU Directive 2010/ 45/EU | |
| Simplified invoices | Permitted for transactions not exceeding €100 | |
| Self-billing | Permitted with agreement between supplier and customer in advance, including process for acceptance of each invoice by the supplier. | |
| Retention of invoices | Six years from the end of the accounting year any transactions fall in. Invoices may be stored outside of Malta with ready access, but must be retained in original format (e.g. paper). | |
| FX rules | Invoice may be issued in foreign currencies, but the VAT due should be stated in €. Any Maltese commercial bank rate at the tax point may be used or the ECB | |
| Invoice corrections | Credit or debit notes may be applied with clear reference to the original invoice number. | |
| Compliance | Right to deduct | Excluded: business and employee entertainment; passenger vehicles and maintenance; artworks |
| Call-off stock | Following the EU's 2020 Quick Fix harmonisation reforms, stock may be transferred from an EU state to an customer location/warehouse in Malta without triggering a VAT registration and supply for a non-Maltese supplier. Title has not passed until the customer takes the goods for production and sale. At which time a zero-rated transaction may be effected. This must happen within 12 months of the original movement | |
| Reverse Charge - B2B | As well as the regular zero-rating reverse charge on cross-border services rules, non residents supplying B2B goods or service domestically to VAT registered customers, they do not need to VAT register. Instead the business customer takes on the VAT obligations. This includes supply of natural gas and electricity by non-resident to Maltese dealer. Malta has not applied the domestic reverse charge mechanism - although may order it on specific transactions especially construction | |
| Cash discounts | There is no formal guidance, so no discount should be accounting for in VAT return. Or at least until taken up, in which case credit note may be used to make and adjustment | |
| Bad debt relief | Permitted for debts over twelve months and with final court judgement demonstrating irrevocability | |
| Import VAT deferment | Postponed VAT Accounting is permitted but importer must apply in advance to the Commissioner for approval. There may be a request for a bank guarantee or similar security. Once granted, the importer may declare import VAT in next return and make no cash payment. Exemption is allowed in the case of an import and immediate (30 days) intra-community supply. | |
| VAT warehouse | Malta does not offer VAT-exempt warehousing. It does operate approved bonded warehouses for deferment of customs duties and import VAT under a suspension regime. | |
| Supply & install | Non-resident suppliers of goods with an install service do not need to VAT register and should rely on the reverse charge instead with their VAT-registered customers. The customer must report the VAT instead. | |
| Use and enjoyment services | Only applied to the rental of pleasure sea craft | |
| Capital goods adjustment period | Movable property: five years. Immovable property: Twenty years | |
| Non-residents VAT recovery | EU businesses may apply for Maltese VAT reclaims through the electronic portal of the tax authorities of their company of residency (8th Directive). Quarterly claims above €400 permitted, with final claim above €50 by 30 Sept of following year. For non-EU businesses, Malta does require a reciprocal agreement (not generally applied requirement) with the country of residence of the claimant. Non-EU businesses must submit a paper-reclaim with supporting invoices via the Cypriot authorities directly (13th Directive). Non-EU businesses do not have to appoint an Cypriot resident Fiscal Representative for the reclaim process. | |
| VAT on Digital Services | Malta follows the EU VAT on digital services regime, introduced in 2015. This includes participation in the One-Stop-Shop (OSS) single EU VAT return (formerly MOSS until 30 June 2021) | |
| Live events | ||
| Distance selling threshold for goods | Nil. Following the EU ecommerce VAT package reforms from 1 July 2021, local Maltese VAT must be charged on all sales by non-Maltese EU e-commerce sellers shipping from within the EU. Imported distance sales not exceeding €150 liable to Maltese sales VAT with IOSS return option | |
| Cash accounting scheme | For professionals (lawyers, accountants etc), engineers and retailers with taxable sales not exceeding €2million per annum | |
| VAT registered cash tills | Certified VAT cash registers must be used. Possible to obtain pre-numbered invoice books as alternative. May also use approved point-of-sale systems. | |
| Statute of limitations | Six years | |
| Other | N/a | |
| VAT Returns | Frequency | Quarterly. |
| Filing method | Electronic (or paper if less than ten employees) | |
| Deadlines (inc payments) | 15th of the second month after the reporting quarter | |
| VAT credits | Repaid automatically where excess input VAT declared in VAT return. May be subject to an audit | |
| Corrections | In subsequent VAT return is less than 5% of VAT due in VAT return and less than six months old. | |
| Non-residents | Permitted. Non-EU may require Fiscal Representative | |
| Other filings | Monthly European Sales Listing for goods 15th of month following, and there is no reporting threshold. If intra-community supplies of goods do not exceed €50,000 in any quarter in last year then may file quarterly. ESL's for services are filed quarterly on the 15th of the month following. Intrastat monthly by the 10th of the following month for supply of goods above threshold: dispatches: €700; arrivals: €700. | |
| SAF-T | N/a | |
| Penalties & interest | Higher of €20 per day or 1% of VAT for missed returns. Late payment interest of 0.06% per month. Fines for underdeclared VAT of 10% to 20% of amount due depending on level on voluntary reporting. | |
| B2C Distance Selling returns | Malta participates in the One-Stop-Shop OSS pan-EU VAT return for distance selling, introduced in July 2021. |
