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Value Added Tax (VAT) in Malta

Updated on Sunday 19th June 2016

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VAT_in_malta.jpgThe value added tax (VAT) was introduced in Malta in 1995 for the first time, and ever since it has undergone a lot of changes. In 2004, when Malta became an EU member, the value added tax has been harmonized with the EU’s Council Directive regarding VAT.

In Malta the value added tax is applied to goods and services made inland. All forms of
transactions are subject to the value added tax.


Value added tax rates in Malta



The standard rate of VAT in Malta is 18%. But there is also a reduced VAT rate of 7% that applies to tourism accommodation. However, only hotels or resorts authorized by the Malta Tourism Authority (MTA) can benefit from the reduced rate.

Another reduced rate of 5% applies to electricity, medical services and equipment, printed materials, certain foods, works of art, cultural events and the mending of clothes, shoes and leather items.

Details about the VAT rates you can obtain from our specialists in company registration from Malta, or by watching the video below:

Malta has a zero tax rate for credited supplies that include:

-    export of goods outside the European Community,
-    brokerage services,
-    the processing of goods re-exported outside the Community,
-    international transport of passengers,
-    certain foods except catered ones,
-    pharmaceutical products,
-    school transports,
-    transports for employees,
-    gold supplied by the Central Bank,
-    intra-community supplies.

Supplies exempt from VAT without credit are:

-    immovable properties,
-    insurance services,
-    financial services,
-    cultural and religious services,
-    lottery,
-    gambling,
-    postal services,
-    healthcare services,
-    education,
-    water provided by a public authority.

A company supplying goods or services in Malta or any country in the European Union is subject to VAT if its annual turnover exceeds 12,000 euros. If its transactions are below the 12,000 euros threshold, but its turnover exceeds 7,000 euros per year, the company must register for VAT, but it has the possibility to drop out of the Maltese VAT system, case in which the company will not invoice VAT, but it won’t claim any VAT refunds either.

Non-Maltese companies delivering goods and supplies in Malta must also register for
VAT, but the registration threshold applies differently to foreign companies thus they must name a VAT representative to maintain a relationship with the tax authorities.

If you want to open a business and you need details about VAT registering, our agents in company incorporation in Malta can provide you with the required information.

 

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