VAT in Malta - a complete guide

Are you shipping goods to customers in Malta? Find out if you should register for Maltese VAT and what the VAT rates are in Malta. Read on.

VAT in Malta - table of contents

Malta introduced the value-added tax in 1995. All regulations concerning Maltese registrations, filing of declarations, and compliance with VAT laws are based on European Union Directives, which Malta has incorporated into its previous legislation. Management of this tax falls under the Maltese VAT Department.

It may be mandatory for entrepreneurs who supply goods or services in the country while being tax “non-residents” to register their business to pay Maltese VAT.

Should you register for VAT in Malta?

There are certain commercial situations in which a foreign entrepreneur must usually register with the Maltese tax authorities. These are in line with the general EU VAT rules and include:

importing goods from outside the EU into Malta,
selling (shipping) or buying (importing) goods between Malta and other EU countries (intra-Community supply),
transactions of purchase and sale of goods in Malta also known as domestic reverse charge,
selling goods online to Maltese consumers (while meeting the Maltese VAT distance selling VAT registration threshold),
storing consignment inventory in rented warehouses,
paying for exhibitions/concerts/conferences/trainings with paid admission,
situations where companies are not Maltese tax residents but provide services in Malta under the reverse charge principle,
supplying goods independently.

Registering as a VAT taxpayer does not apply to many companies. If a business wants to provide services to local Maltese companies, it can use the reverse charge process. This results from changes introduced in the VAT Package of 2010.

Providers of electronic, broadcasting, or telecommunication services offered to consumers in Malta must register for VAT in a selected EU country. The MOSS scheme facilitates this process, allowing for the submission of a declaration that applies across all 27 member states.

Important!

Starting July 1, 2021, if online sellers surpass €10,000 in sales to Maltese consumers, they can join VAT OSS. This means they file one VAT return for all EU states and pay foreign tax based on the buyer’s country rates. They don’t need to follow Maltese tax rules, except for using the foreign VAT rate. In case of not registering for VAT OSS, all rules applicable in Malta must be followed – but only concerning distance sales.

What are Maltese VAT registration thresholds?

There is no VAT registration threshold for non-resident companies providing taxable services in Malta. Therefore, the first invoice should be subject to Maltese VAT.

Firms registered for VAT in the European Union and selling goods to Maltese consumers online are subject to a distance selling threshold of 35,000 euros per year.

What is the format of the Maltese VAT number?

The VAT registration process typically takes three to four weeks. Upon registration, the company receives a unique Maltese VAT number. Each EU member state has a predetermined, specified format for the VAT number. The format of the number issued in Malta depends on the registration category.

Maltese VAT number

Country code: MT

Format: 12345678

Number of characters: 8

What is the tax point for Maltese VAT?

Malta’s tax point (time of supply) rules determine when the VAT is due.

VAT on supplies taking place in Malta will be required by the earlier of the following dates:

the tax point,
the day of payment for the supply.

When an invoice is issued within 30 days from one of the specified dates above, the tax becomes automatically due on the day of issuing the invoice.

VAT on intra-Community supplies is due on the 15th day of the month following the tax point, or on the date of issuing the invoice for that supply.

Where an intra-Community acquisition of goods has taken place, the chargeable event for intra-Community acquisition of goods is deemed to occur on the date which would be the date of the chargeable event had those goods been supplied in the member state where the acquisition is made.

Rates of VAT in Malta

While Malta adheres to the European Union rules regarding VAT compliance, it still retains the freedom to set its standard (upper) VAT rate. However, this rate cannot be lower than 15%. When supplying goods or services within Malta, suppliers are obligated to apply the appropriate VAT rates. Another duty is to collect the tax for subsequent payment to the Maltese tax authorities by completing a VAT form.

RATE	TYPE	TYPE OF GOODS OR SERVICES
18%	standard	all other taxable goods or services,
13%	reduced	domestic flights, admission to sports events, admission to cultural events and amusement parks, firewood, some agricultural articles, wine production (from the farm), cut flowers and ornamental plants,
5%	reduced	some food products, some take-away meals, some cut flowers and plants for food production, some non-alcoholic beverages, water supply items, some pharmaceutical products, some medical devices for disabled persons, some agricultural products, housekeeping services, accommodation in hotels (bed and breakfast), some social services, restaurant and catering services (other than entertainment centers), services provided by boarding schools, facilities for disabled persons, facilities providing accommodation for mentally impaired persons, persons with mental disorders, and drug addicts.
7%	reduced	some pharmaceutical products, some books (excluding e-books), some newspapers and magazines, some tickets to theaters and concerts, supply of electricity, gas, and central heating,
0%	zero	intra-Community and international air and sea transportation. accommodation in hotels.

If you like our content, join our busy bees community on Facebook, Twitter, LinkedIn, Instagram, YouTube, Pinterest, TikTok.

Author: Lucy Adams
She has extensive knowledge in the field of accounting and constantly gains experience working for both small businesses and larger corporations. Her mission is to explain complex financial and accounting issues and teach business owners and those interested in the subject how to manage their finances effectively. She enjoys giving practical advice, discussing current accounting issues, and analyzing legislative changes that may affect business operations. She enjoys a straightforward approach to finance that helps entrepreneurs focus on growing their businesses. She translates complex issues into easy-to-understand language so that anyone can confidently make decisions that impact the success of their business.
View all posts