VAT in Malta guide

VAT rates

The term “taxable supplies” refers to supplies of goods and services that are liable to VAT.

The VAT rates are:

• Standard rate: 18%
• Reduced rates: 5% and 7%

The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides a reduced rate or an exemption.

Malta VAT for digital service providers

In case of digital services, telecom services or broadcasting services supplied in a B2B context, the place of supply is the place where the recipient is established. No Malta VAT should be charged, and reverse charge applies unless supplier and customer are established in Malta. In case of digital services, telecom services or broadcasting services supplied in a B2C context we refer to the section on the Mini One-Stop Shop below for more information.

Mini One-Stop Shop

The optional simplification measure called the “Mini One-Stop Shop” (MOSS) with respect to digital services, telecommunication services and broadcasting services supplied in a B2C context. The supply of these services is generally considered as taking place in the Member State of the customer, not the Member State of the supplier.The MOSS scheme allows all taxable persons supplying digital services, telecommunication services or broadcasting services to nontaxable persons in EU Member States in which they do not have an establishment, to account for the VAT due on those supplies via a web portal in the Member State in which they are identified. The MOSS allows qualifying taxable persons to avoid registering in each Member State of consumption. The MOSS simplification is available both for taxable persons established in the EU and outside the EU. The MOSS generally mirrored the scheme that was in place for non-EU established suppliers of electronically supplied digital services, telecommunication services or broadcasting services supplied to final consumers. Persons already registered under the pre-existing scheme for electronically supplied digital services, telecommunication services or broadcasting services, should retain their existing individual VAT identification numbers for the purposes of the MOSS.

Late – registration penalties

Penalties are assessed for late registration or for failure to keep records or submit returns. A penalty for late registration is assessed on an amount equal to the higher of the following:

• 1% of the excess, if any, of the output tax due over input tax (and any allowable deductions) for the first VAT period following registration
• EUR 20 for every month or part of a month that the registration is late.

The penalty is capped at a maximum of 20% of the output tax due over input tax (and any allowable deductions) for the first VAT period following registration.