VAT

We are specialised in Indirect Taxation

Overview

Zampa Debattista was founded as a specialised consultancy, with VAT advisory being one of its two core services.

Matthew Zampa, its co-founding Partner, is a seasoned Indirect Taxation Specialist with a demonstrated history of handling complex VAT cases in Malta and beyond, since 2008.

01 Offerings

Our VAT Services

VAT Administration

  • VAT accounting services
  • Electronic submission of VAT returns, Recapitulative Declarations and EU VAT refund claims
  • VAT training
  • Obtaining EXO number

Assessment & Certification

  • Tailor-made VAT advisory services
  • VAT scans, with a view to highlighting certain VAT exposures, applicable to all sorts of businesses
  • Conducting VAT reliability assessments
  • Certifying computerised systems used to generate fiscal receipts

Official Representation

  • Assistance when appearing before the Administrative Review Tribunal
  • Acting as a communication channel with the Office of the CfR
  • Obtaining written guidance on complex VAT issues from the Office of the CfR
  • VAT court representation

Advisory on Special Regimes

  • Efficient VAT structures, particularly applicable to exempt businesses
  • Yacht Leasing Structures
  • Aviation Leasing Structures
02 Testimonials

Zampa Debattista is an Authority on VAT matters and we look to them as specialists in the area to guide us on all VAT matters.

Michael MerciecaCo-Founder of QuickLets & Zanzi Homes

We have been using the services of Zampa Debattista in relation to VAT advice for the past 3 years. Matthew and Charles always tackle our queries in a professional manner and would recommend their services to anyone.

Anton AzzopardiPartner at ADD+
03 F.A.Q.

Malta VAT

In what circumstances is a business required to register for VAT purposes in Malta?

In principle, a taxable person who carries out supplies of goods or services for a consideration in Malta is required to register for VAT purposes in Malta. A taxable person means any person, physical or corporate, who independently carries out any economic activity. An economic activity is any activity of producers, traders or persons supplying services and includes also the activities of the professions, the exploitation of tangible and intangible property for the purpose of obtaining income therefrom on a continuing basis as well as the admission of persons in any place for a consideration.

As a rule, businesses that only carry out exempt without credit supplies (such as insurance and financial services, medical care and education) or holding companies which merely hold shares in their subsidiaries are not generally required to register for VAT purposes.

A business that is not established in Malta is deemed to be a non-established taxable person and shall be required to register for VAT if he makes taxable supplies for consideration to non-taxable persons in Malta. However, if the supplies are made to a VAT registered taxable person established in Malta, then the non-established taxable person is not required to register for VAT in Malta.

How to register for Malta VAT? What is the difference between Article 10, Article 11 and Article 12?

Introduction

In Malta we have three types of VAT registrations:

  1. Article 10 Registration – Standard VAT registration
  2. Article 11 Registration – Small Undertaking
  3. Article 12 Registration – For taxable persons suppling exempt (without credit) supplies, but would be registered under this article if, they have an obligation to pay VAT in Malta.

Article 10 VAT Registration

Who is obliged to be registered under this Article?

  1. If you are a taxable person established in Malta and you are supplying goods or services (in Malta) which are not treated as exempt without credit and you are not registered under Article 11, then you are obliged to be registered under this article, within thirty (30) days of your first supply.
  2. If you are a taxable person established in Malta, rendering general services to another VAT registered customer established in another Member State for which VAT is payable by the Customer (via the reverse charge mechanism), then you are obliged to be registered under this Article.
  3. If you are a taxable person not established in Malta and you are supplying goods or services taking place in Malta and you are the person responsible to charge and collect Maltese VAT, then you are obliged to be registered in Malta by not later than thirty (30) days from the date of that supply.
  1. If you are a taxable person established in Malta and you are requested by the Commissioner for Revenue to register under this Article, you shall apply to be registered within thirty (30) days from the date on which he is served with a notice of containing such request.

What if I am in the process of setting up a business and I not carrying on any activity at the moment, do I need to be registered for VAT?

  1. But, if you have an intention to carry out a taxable economic activity, then you have the option to register for VAT under in terms of Article 10(5) of the Malta VAT Act.

Article 11 VAT Registration

Who qualifies as a small undertaking?

If you are registered in Malta and you are not registered under Article 10 and your supplies will fall within the below brackets, then you would qualify as a small undertaking.

Category Entry Threshold (EUR) Exit Threshold (EUR)
A Economic activities consisting principally in the supply of goods 35,000 28,000
B Other economic activities currently 24,000

set to rise to 30,000 (*)

currently 17,000

set to rise to 24,000 (*)

(*) on such date as the Minister for Finance may establish by notice in the Gazette – based on Malta Budget 2021

If you are a taxable person and you qualify as a small undertaking, are you obliged to be registered under Article 11?

No. You still can opt to be registered for VAT under Article 10 of the Malta VAT Act.

What are the benefits of being registered under Article 11?

If you qualify as a small undertaking and you apply to be registered under Article 11, the taxable person will not charge any VAT on his supplies, however, he will not have a right to deduct input VAT.

On the other hand, the taxable person would only have limited compliance obligations, such as submitting one declaration per year, contrary to the obligation of submitting quarterly VAT returns where registered under Article 10. Possibly, should the taxable person not exceed the €7,000 turnover in a calendar year, he would not be obliged to submit any declarations. However, once the €7,000 threshold is exceeded, the Commissioner for Revenue needs to be informed accordingly, so as to start submitting an online declaration.

Article 12 VAT Registration

Who is obliged to be registered under Article 12?

In principle, a taxable person supplying exempt (without credit) supplies is not obliged to be VAT registered in Malta. However, in case the same taxable person receives services for which he is the person liable to account for VAT in Malta (via the reverse charge mechanism), then he is obliged to register for VAT under Article 12 by not later than the date on which he receives such a service.

On the other hand, if a taxable person or a non-taxable legal person (such as a public authority) intends to make an intra-Community acquisition (“ICA”) in Malta during a calendar year and the value of the ICA exceeds €10,000, then he shall be obliged to register for VAT under this article by not later than the date of that acquisition.

What are the VAT rates in Malta?

In accordance with Council Directive 2006/112/EC (“VAT Directive”), Member States shall apply one standard rate of VAT, which shall be fixed by each Member State as a percentage of the taxable amount and which shall be the same for the supply of goods and for the supply of services. The standard rate shall not be lower than 15%.

However, Member States may apply either one or two reduced rates. Such reduced rates shall be fixed as a percentage of the taxable amount which may not be less than 5%.

  • Standard Rate in Malta – 18%
  • Reduced Rate (1) – 7%
  • Reduced Rate (2) – 5%

The reduced rate of 7% is applied on:

  • Accommodation services (where premises should be licensed in virtue of the Malta Travel and Tourism Services Act)
  • Use of sporting facilities

The reduced rate of 5% is applied on:

  • The supply of electricity
  • Confectionery items and similar items
  • Medical accessories
  • Printed Matter
  • Items for the exclusive use of the disabled
  • The importation of works’ of arts collector’s items and antiques
  • Minor repairing of bicycles/shoes and leather goods/clothing and household linen
  • Domestic care services such as home help and care of the young, elderly, sick and disabled.
  • Admission to museums, art exhibitions, concerts and theatres.

How to submit a VAT return?

VAT Return

Article 10

A taxable person identified for VAT purposes under Article 10 is required to submit with the Office of the Commissioner for Revenue (‘CfR’) a VAT Return for each VAT period. The VAT periods typically cover three (3) month periods and are generally (but not necessarily), calendar quarters. However the CfR may  allow a taxable person to have monthly (e.g. exporting companies) or annual (e.g. small undertakings with limited turnover) VAT periods. A VAT Return together with the respective VAT payment (if any) shall be due for submission within one month and fifteen days from end of that VAT period. In other words, the deadline shall be the 15th day of the second month following end of the VAT period. Should the 15th fall on a weekend or on a Public Holiday, the deadline would be extended to the next working day.

A corporate taxable person is obliged to submit its VAT Returns online by accessing its VAT online portal. On the other hand, an individual still has the option to submit the VAT Returns manually (by post) however, the use of the VAT online portal is highly recommended due to several benefits. The main benefit is that the deadline is extended by an additional seven days (that is, the 22nd) when the return is submitted online. However, if the 22nd falls on a weekend or on a Public Holiday, there are no additional extensions.

If the return is submitted after the 15th but before the 22nd and it results in a VAT payment due to the CfR and that payment does not reach the CfR by the 22nd, the seven days benefit shall be revoked and that return will be deemed to be submitted late. As a result, the taxable person shall become subject to penalties and interest.

 

Examples
VAT Periods Deadlines
January to March / April to June

July to September / October to December

Due 15th May / Due 15th August

Due 15th November / Due 15th February

February to April / May to July

August to October / November to January

Due 15th June / Due 15th September

Due 15th December / Due 15th March

March to May / June to August

September to November / December to February

Due 15th July / Due 15th October

Due 15th January / Due 15th April

 Other Declarations

Article 11

A taxable person identified for VAT purposes under Article 11 should submit to the Office of the CfR a periodical declaration covering a twelve (12) month calendar period. The deadline is also set at one month and fifteen days after end of that calendar year (15th February) however, it is generally extended by an additional month (that is, 15th March).

If during the calendar year the taxable person’s turnover does not exceed € 7,000, he is not required to submit the annual declaration.

Article 12

 A taxable person or a non-taxable legal person who is identified for VAT purposes under this VAT Article, and who makes:

  1. a taxable intra-Community acquisition of goods in Malta; or
  2. communicates their VAT identification number with the supplier and receives services falling under the general B2B place of supply of services rule, which are taxable in Malta;

should submit a Notice of Payment together with the respective VAT payment to the Office of the CfR. Malta VAT at 18% applies on the taxable amount of the aforementioned transactions and every person liable for the payment of that VAT should pass it onto the Commissioner, as follows:

  • The payment of VAT on supplies listed in point A. above, by not later than the fifteenth day of the month following that during which it becomes chargeable.
  • The payment of VAT on supplied listed in point B. above, by not later than the fifteenth day of the second month next following either the date of the invoice or of the month during which the supply of services is received, whichever is the earlier.

The Notice of Payment may be submitted through the VAT online portal of the taxable person.

In addition, an annual ‘Declaration of the Payment of VAT’ should also be submitted online. This is a declaration/statement of all the tax paid during a particular year and is normally due for submission within one month and fifteen days after end of a calendar year. 

Are there any VAT services available online?

The Office of the Commissioner for Revenue put at the disposal of taxable persons registered for VAT purposes in Malta electronic services for the purpose of filling statutory returns and other forms through an efficient and friendly way which is the VAT online portal.

A taxpayer or a taxable person may submit online forms himself using his personal e-ID by using the Personal Services. Alternatively, he may, appoint a representative to file electronic forms on his behalf and use the Assigned and Delegated Services.

The submission of VAT returns and VAT adjustments, recapitulative declarations, requests for change of address and lately upgraded to requests for call-off stock are amongst the several submissions via the VAT online portal.

Taxable persons who wish to submit forms electronically must first be registered for this purpose with the Commissioner for Revenue by filing the Form CFR03. If the taxable person has opted to appoint a registered tax representative to file statutory returns on his behalf, the form CFR02 has to be completed and filed.

Does Malta have VAT group registration and what would be the benefits?

Yes, two or more persons (corporate not physical) established in Malta that are bound together by financial, organisational and economic links and which meet the set eligibility conditions may apply for a VAT registration as a single person. VAT group registration is limited to licensed operators in the Finance and Insurance sectors as well as operators in the Gaming sector. The principal benefit of a VAT group registration is that transactions between the members of the group are disregarded for VAT purposes.

Read more: VAT Grouping in Malta

What would be the VAT implications for a gaming company to operate from Malta?

In the case of gaming, the VAT implications depend on type of gaming transaction,  the place of supply and whether the supply of gaming is treated as taxable in the Member State of the customer. Supplies of gaming that are treated as taxable trigger an obligation to register for VAT purposes in the Member State where the transaction falls to be taxed. Given the real possibility of having to register for VAT in multiple jurisdictions, an optional simplification scheme is available (the Mini One Stop Shop) under which one on-line registration in the Member State of establishment is required and only one on-line VAT return needs to be furnished accounting for the VAT due to the respective Member States. A gaming operator established in Malta is obliged to register for VAT if he carries supplies of gaming which are treated as taxable in Malta or if he wishes to opt for registration under the MOSS.

What are DLT assets and how are they treated for VAT purposes?

DLT assets can be a virtual token, a virtual financial asset, electronic money or a financial instrument that is intrinsically dependent on, or utilises, Distributed Ledger Technology (a database system in which information is recorded, consensually shared, and synchronised across a network of multiple nodes). The VAT treatment of transactions involving DLT assets will not necessarily be determined by their categorisation but will depend on the purpose for and the context in which the transaction is made according to VAT legislation.

How is the letting of immovable property treated in Malta?

In principle it is exempt from VAT but if the letting is for the purposes of accommodation, under certain conditions, then it is treated as a taxable supply at a reduced rate of 7%. The letting of property by a limited liability company to an Article 10 VAT registered person for the purpose of the economic activity of the latter is also treated as a taxable supply but at the standard rate of 18%. Certain types of letting of property for not more than thirty days by a taxable person in the course of an economic activity, such as a the letting of a wedding reception venue, is also treated as a taxable supply of letting at the standard rate of 18%.

What are the compliance obligations related to VAT returns in Malta?

Article 10 registered persons are required to furnish to the Commissioner for Revenue a periodical VAT return containing a summary of VAT transactions carried during the reporting period together with payment of the tax, if any. Generally, the reporting periods are set at calendar quarters with the return required to be submitted electronically on-line via the web portal of the Commissioner by not later than the 22nd day of the month next following the end of the reporting period. Taxable persons with less than ten employees are required to furnish a paper format VAT return by not later than the 15th day of the month next following the end of the reporting period unless they opt to file the VAT return electronically.

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05 Get in Touch

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Matthew Zampa

Founding Partner, Head of VAT

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