VAT in Malta

Malta is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.

As an EU member state, Malta is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. Malta is a member of the European single market economy and uses the Euro (€) as its currency. In Malta VAT is known as: Taxxa fuq il-Valur Miżjud, however this is commonly abbreviated to VAT.

VAT registration in Malta

Both EU and non-EU businesses may trade in Malta without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in Malta for the registration of non-resident traders, but you will need one to record transactions and your Maltese customers will want proof that you have obtained one.

There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Maltese VAT registration include:

• Importing goods into Malta;
• Organising live events, conferences, etc. in Malta;
• Holding goods in a warehouse in Malta as stock for resale;
• Buying goods within Malta that are subsequently re-sold in-country;
• Selling goods from Malta to other EU member states;
• Distance-selling to private individuals in Malta, e.g. internet retailing or trading through an e-commerce platform.

Registering for Maltese VAT usually takes 4-6 weeks once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.

Malta VAT compliance

There are detailed rules controlling the recording and processing of Maltese transactions for VAT purposes. This includes guidelines on:

• Maltese invoice requirements;
• When to issue a Maltese tax invoice;
• Foreign currency reporting;
• Credit notes and corrections;
• Correcting entries from prior returns;
• Which accounting records must be maintained.

Maltese VAT rates