What is the Standard VAT Rate in Malta?
18%
In Malta, Value Added Tax (VAT) or Taxxa fuq il-Valur Mizjud in Maltese was introduced in 1998. The Maltese VAT legislation, known as the VAT Act, Chapter 406, which contains the provisions on the imposition of a VAT in place of an excise tax system on imports, products and services, is in line with the EU VAT Directive.
The Commissioner for Revenue is responsible for the administration and collection of VAT.
18%
Reduced VAT Rates: 5% and 7%
The Zero VAT Rate applies for instance to food for human consumption (with some exceptions), supplies of seeds or other means of propagation of plants classified under the previous item and supplies of live animals of a type generally used as, or yielding or producing.
Reduced VAT Rates: 12%
As from 1 January 2024, a reduced VAT rate of 12% shall be applicable to chartering activity under certain circumstances, custody and management of securities, management of credit and guarantees, and services related to the care of the human body.
VAT liability applies to the following transactions:
In Malta for the non-resident companies providing taxable supplies there is no VAT registration threshold, thus the Maltese VAT should be already included in the first invoice. For EU VAT registered companies which are selling goods through the internet to consumers in Malta, there is a VAT registration threshold which is 35,000 Euros per annum. Non-Maltese/resident companies which are providing goods or services in Malta to local companies or consumers may have to register their business for Maltese VAT.
The Maltese VAT Act allows for three different types of registrations for VAT which are listed in Article 10, 11, 12 of the VAT Act.
In general those who are performing an economic activity are required to register for VAT in Malta under Article 10 of the Maltese VAT Act, but if the annual turnover doesn’t exceed the threshold, the registration under Article 11 of the just-said Act can be chosen. The registration under Article 12 is needed in the case when a person non-taxable or taxable but not registered under Article 10 with making intra-community acquisition of goods in Malta and the value exceeds 10,000 Euros.
Following the registration, a Maltese VAT number is to be assigned to the registered company.
The format of the VAT number depends on the category of registration. When the VAT number is allocated, the trading and the Maltese VAT charging can be started in the way of complying with the Maltese VAT compliance provisions.
Invoices must contain certain disclosure details which are contained in the Maltese VAT Act, not later than the 15th day of the month following the chargeable event. VAT invoices shall be provided by registered persons for taxable supplies of goods and services. However, for retail sales, fiscal receipts shall be issued.
As per the Maltese VAT law, the electronic invoicing in line with the related EU Directive (with proper signature, authenticity and agreement by the recipient) is allowed as well. Additionally, issuing simplified VAT invoice is also permitted for amounts not exceeding 100 Euros. Furthermore, there is a possibility to issue a credit note which shall be cross-referenced to the original invoice, in order to reduce VAT charged and reclaimed on a supply.
Record retention period and statute of limitation period
As per the provisions of the Maltese VAT Act, the records shall contain those details which can be supported by such information, documents and accounts as set out in the Schedule nb11 of the mentioned Act. The records shall be maintained for an at least 6 years period, from the end of the year to which they relate, or in other cases the Minister can impose another period. There are some exceptions which may apply for instance to adjustment forms or appeals and so on.
In Malta, taxpayers declare their income, calculate tax and submit through the self-assessment tax system.
The VAT Return deadline is 9 months after the financial year-end for companies, and 10 months in the case when the tax return is filed electronically. The standard tax period is quarterly or monthly on request. The deadline for the VAT Return is the 15th day of the second following month.
The VAT Returns for Article 10 registrations shall be submitted within 6 weeks following the end of each VAT quarter, and the VAT Declarations for Article 11 and 12 registrations shall be submitted by 15th March and 15th February respectively following the end of the calendar year. Periodical VAT returns shall be submitted electronically to the Maltese VAT Authorities before the 22nd day of the second month following the month during which the relevant tax period ends.
In Malta the process of the submission of the VAT declaration is simple and fast via Internet. The process takes 90 days at most.
In Malta the fiscal representative is not required neither for the non-EU companies nor for the EU companies.
In Malta, an Intrastat declaration must be submitted as soon as the intra-community transaction amount reaches the threshold which is set by the Intrastat customs code.
The deadline for submission is the 10th working day of the month following the declaration period. When the thresholds for intra-community transactions are exceeded, an Intrastat declaration shall be filed during the month when the threshold was reached. The Maltese Intrastat threshold for arrivals and dispatches is set at 700 EUR per return.
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