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Value Added Tax in Malta

Value Added Tax in Malta

Updated on Sunday 13th November 2016

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VAT-in-MaltaThe value added tax in Malta (VAT) is applied to all goods and services imported by Maltese companies and it is collected by the Comptroller of Customs. Products and services made in Malta are also subject to VAT. Taxable good and services in Malta mean also leasing or hiring of products or services or attributing or rendering a right. In order to avoid double taxation, Malta has signed numerous double taxation treaties.

VAT rates in Malta

The standard VAT rate in Malta is 18%, but there are also two reduced rates of 7% and 5%. The reduced rate of 7% is applied to tourism accommodations, if a license from the Malta Tourism Authority (MTA) has been obtained. The 5% reduced rate applies to:

  • - medical equipment,
  • - electricity,
  • - certain foods,
  • - care services for minors, old or sick persons,
  • - works of art,
  • - printed materials,
  • - access fees in museums, concerts and theatres.

Goods and services exempt from VAT in Malta

There are a series of zero rated supplies or exempt with credit and they include:

  • - exports,
  • - international traffic and transportation,
  • - gold,
  • - local transportation,
  • - intra-Community goods and services,
  • - certain ships and aircrafts,
  • - certain categories of foodstuff,
  • - packaged medicines.

The products and services exempt without credit include:

- real estate property (excepting tourism accommodation with a MTA license, parking spaces, property rental by a limited company for economic activities),

  • - insurance and financial services,
  • - cultural and religious facilities,
  • - lottery and gambling,
  • - postal services,
  • - educational services,
  • - health facilities,
  • - the supply of water by authorities.

Find out from the video below how the VAT applies in Malta:

Registration for VAT in Malta

Maltese companies that supply goods and services in Malta or another EU country and have an annual turnover that ranges between 12,000 and 28,000 EUR are required to register for VAT in Malta.

If a company does not exceed the 12,000 EUR threshold, but reaches an annual turnover of 7,000 EUR, it has the possibility to register for VAT, but it may not choose the Maltese VAT system therefore it will not charge VAT. A company is not required to register for VAT in Malta, if its annual turnover does not exceed the 7,000 EUR threshold.

Non-Maltese companies are subject to the same regulations as Maltese companies, except for the turnover thresholds, if a company doesn’t make supplies in Malta. Foreign companies are required to register for VAT in Malta, if they sell supplies that exceed 35,000 EUR annually.

If you want to open a company and you need legal advice, you can contact our law firm in Malta for details about the taxation system.



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