VAT in Malta guide
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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 One-Stop Shop below for more information.
One-Stop Shop
On 1 July 2021 EU has introduced a so-called “One-Stop-Shop” (OSS) system which has replaced a previously applied “MiniOneStopShop” (MOSS) system. OSS has extended the scope of MOSS from digital goods and services to all goods and services sold B2C in the EU. OSS is an electronic portal that simplifies VAT compliance for online sellers, i.e., online businesses that sell goods and/or services in the EU are now only required to register for VAT in one EU country for all their B2C sales in the EU. If such sellers’ B2C sales in EU are above the applicable threshold, which is 10.000,00 EUR throughout the EU, businesses are liable to charge, collect and remit VAT in the Member State where their B2C buyers are located, instead of the Member State or country of their incorporation, i.e. online sellers have to apply the VAT rate of the Member State where the goods are dispatched or where the services are supplied. AS each EU Member State has an online portal where businesses can register for OSS and submit their VAT returns in one Member State for their B2C sales throughout the EU, it is estimated that VAT compliance costs will be significantly reduced. Registration in the OSS system is available for both – taxable persons established in the EU and outside the EU.
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.
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