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Taxation of Digital Games in Malta

Updated on Tuesday 18th August 2015

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Taxation-of-Digital-Games-in-MaltaThe legislation on online gambling was passed by the Maltese Government in 2000 followed by the implementation of the Remote Gaming Regulations under the Lotteries and Other Games Act in 2001. When becoming an EU member state in 2004, Malta also became the first EU country to regulate internet gambling. In order to make Malta an attractive destination for online gaming operators, the income tax was also amended with several provisions for international companies. The corporate tax rate in Malta is 35% applied to the chargeable income, but certain types of companies benefit from reduced tax rates. Due to the full imputation system, shareholders have the right to claim refunds when dividends are paid by trading companies.

Taxes on gaming in Malta

The taxes applied to Maltese companies in the online gaming industry are strictly related to the license class and type of games the company provides. The Lotteries and Gaming Authority in Malta provides four classes of licenses. Companies offering casino-type games are taxed with 4,600 euros a month for the first six months and then 6,900 euros per month for the remaining licensing period. Depending on the type of license a Maltese casino is issued, the taxes apply as it follows:

  • - operators with a class 1 license will pay 7,000 euros per month,
  • - operators with classes 1 to 4, operating on a hosting platform, are levied 1,200 euros per month,
  • - the gaming tax for operators with class 2 license are levied 0.5% on the gross amount of bets accepted,
  • - the Maltese gaming tax for class 3 license operators is 5% on the net income,
  • - there is no gaming tax applied to class 4 license operators.

Host platforms for gaming operators benefit from tax exemptions for the first six months and a reduced rate of 2,330 euros for the following six months.

Tax capping for online game operators in Malta

The maximum gaming tax a Maltese company in the gaming industry must pay on an annual basis is 466,000 euros, no matter the license class. However, for casinos with a class 1 license operating from host platforms with class 4 licenses, the tax cap is limited to the sum of tax payable by all casinos when the host platform reaches the 466,000 euros.

For complete details about the taxation system and incentives for gambling operators, you can contact our specialists in company incorporation in Malta.

 

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