The introduction of the VAT Grouping legislation in Malta has provided licensed operators with a fiscal tool aimed at alleviating VAT administrative considerations between group members, improving the group’s cashflow position and, in certain instances, optimising their VAT position of the group. The implementation of this regime has been very popular with a number of licensed businesses, particularly those operating in the gaming sector.

VAT Grouping Benefits

The main benefit of the VAT grouping regime is that intra-Group transactions between members of the VAT group are disregarded and therefore no output VAT is charged on any supplies made between the members. Also, the VAT group will be identified with one Malta VAT number, having one of the members as the group reporting entity (GRE).  The GRE will submit one VAT return covering all transactions made by the group members.

VAT Grouping Eligibility

Two or more corporate persons established in Malta may apply to the Commissioner for Revenue (CfR) to be registered as a single taxable person for the purposes of the Malta VAT Act if the following VAT grouping conditions are satisfied:

a) At least one of the applicants is a taxable person licensed or recognised in terms of any one of the following acts:

    • The Banking Act
    • The Financial Institutions Act
    • The Gaming Act
    • The Insurance Business Act
    • The Insurance Distribution Act
    • The Investment Services Act
    • The Lotteries and Other Games Act
    • The Retirement Pensions Act
    • The Securitisation Act

b) Each of the applicants is bound to the other members by financial links, organisational links and economic links; and

c) At the time of application, all applicants have submitted all returns and notices due in terms of the Malta VAT Act, and all income tax returns due in terms of the Income Tax Management Act, and have settled in full any and all amounts due by way of tax declared in the aforementioned returns and notices, as well as any interest and administrative penalties due pursuant to the Act and the Income Tax Act and Income Tax Management Act

How can we help?

We can sit down and discuss the VAT grouping regime in more detail and determine how your organisation may benefit from the implementation of this regime. Following our assessment, we can then assist with the actual implementation and registration of the VAT Grouping in Malta.

Matthew Zampa

Partner

Brandon Gatt

VAT Leader

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