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Malta VAT guide

VAT compliance and reporting rules in Malta

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.

Our VAT Calculator & VAT Filer products on a single platform, VAT Calc, are unique in that they come with all of this included out-of-the box for Malta and scores of other countries around the world.

Malta VAT country guide

Highlights Local term Att dwar it-Taxxa fuq il-Valur Mizjud ('VAT')
VAT Rates - standard 18%
VAT Rates - reduced 7%; 5%; 0%
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 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 0.33% per month (7.2% annual from 2022). 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.

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