All entities, including Self-employed individuals, Partnerships and Companies must register with the VAT office to comply with the local Value Added Tax legislation of 1998.
IF YOU ARE ALREADY VAT REGISTERED
Even though you may already be VAT registered it is important that you verify whether you need to register again for the purpose of any new business venture.
If the new business activity is in addition to other business activities carried out under an existing VAT number, the same number should be used for the new activity. However, the registered person must inform the Department of VAT in writing about the nature of the new business activity. If the new business activity will be carried out under a new Limited Liability Company, then a new registration is required.
Individuals or entities that are VAT registered have to regularly send in a VAT Return that would include the total sales, purchases and VAT credit or payable amounts. This declaration would normally have to be sent in every 3 months unless otherwise indicated by the VAT office. The VAT Return can be submitted electronically through the VAT Online Services via Personal Services / Assigned or Delegated Services. The approximate time to fill in the online VAT tax return varies as it is dependent on the type of taxpayer / company requirements. However, during the filling in of return, one may opt to save the details and resume later. On submission, the user will receive a system generated acknowledgement email. Upon submission, the VAT tax return is processed automatically and no further back-office user intervention is required. Note that whenever the declared vat tax return results in a refund, such refund must be issued automatically within five (5) months from the acknowledgment date of the VAT tax return or the due date whichever is the latest.
If Maltese entrepreneurs wish to claim VAT refund they may do so by filling in the VAT Return. Sole traders who employ more than 10 employees and companies must submit the VAT refund online through VAT Online Services via Personal Services / Assigned or Delegated Services respectively.
EU businesses wishing to claim MT VAT may apply for the VAT refund (8th Directive) by means of the web portal of their Member State. A thorough explanation is given in the APPLYING FOR A VAT REFUND (8TH Directive) section below.
Non EU businesses claiming MT VAT may apply for the VAT refund (13th Directive). More information can be found in this link.
For further information on VAT refund click here.
For further details on VAT reporting click here to view the Guide to Submitting a VAT Return.
What is VAT taxable and what is exempt?
In Malta there are 3 different rates of VAT, as well as a group of products and services that are exempt, as shown in the table below:
|Rate of VAT||Description|
|7%||Accommodation in Hotels and other licensed premises for tourists as specified in terms of the Malta Travel and Tourism Act|
|5%||The supply of electricity, certain confectionery, medical accessories, printed matter, items for the exclusive use of the disabled, domestic care services, minor repairs of bicycles, shoes, leather goods, clothing and household linen, admission to Museums, art exhibitions, concerts and theatres and the importation of works of art, collector’s items and antiques.|
|0%||Exports, intra-community supplies, local and international transport, supply and repair of commercial aircraft and vessels, duty free supplies, food, pharmaceuticals, investment gold, goods under a customs duty suspension regime, and the supply of goods on board cruise liners|
|Exempt||Immovable property, non-commercial rent, services by non profit making organisations, insurance, banking and investment services, sports, religious and cultural activities, lotteries and public postal services, health, welfare, education, public broadcasting and the supply of water by a public authority, letting of space for artistic and cultural activities|
WHAT KIND OF BOOKS AND RECORDS DO YOU NEED TO KEEP AND FOR HOW LONG?
You need to keep the following records and documents:
- Copies of fiscal receipts issued
- Fiscal Cash Register (FCR) readings
- All Customs import/export documentation
- Purchases and Sales Invoices
- Debit and Credit Notes
- Cash Books and Petty Cash Books
- Day Purchases and Sales Ledger
- Value Added Tax account and Annual VAT account
- Bank account connected with the business
- Any other records and documents relevant to your economic activity
You are obliged to retain these records and documents for six years as the Department may request them for inspection.
However in cases where the provisions for partial attribution on capital goods and on immovable property applies, the six years shall start to run from the end of the five year period or twenty years period as the case may be.
APPLYING FOR A VAT REFUND (8TH DIRECTIVE)
Taxable persons who incur VAT in connection with their business activities in a Member State in which they do not make supplies of goods or services are entitled to deduct the VAT charged in that Member State. This "deduction" is by means of a refund of VAT from the Member State in which the VAT was paid.
For information related to VAT Refund click here or click here to apply online.
Any objections to the decision taken by the Commissioner for Revenue may be appealed through a legal professional online.
The services for the legal professionals can be accessed here.
For more information related to the Administrative Review Tribunal on VAT, click here.
LINKS TO RELATED TAXATION PAGES
Resources and Further Details
Office of the Commissioner for Revenue
last updated Jan 2023