Your Guide to Value-Added Tax in Malta

Value-Added Tax (VAT) is a significant aspect of financial transactions for individuals and companies in Malta. Understanding VAT regulations and compliance procedures is essential for anyone engaged in economic activities.

Here, we simplify the complexities of VAT laws to help you navigate the world of taxation with confidence.

1. VAT Registrations

If you’re conducting any economic activity, whether as an individual or a company, you’re considered a taxable person and must register for VAT within 30 days of starting your activity. Failure to register on time can lead to hefty penalties. However, pure holding companies that are not engaged in economic activities are exempt from VAT registration.

Types of VAT Registrations

There are three types of VAT registrations under the VAT Act:

• Article 10: For taxable persons with annual turnover exceeding specified thresholds. They charge VAT on supplies, can reclaim VAT on expenses, and file quarterly VAT returns.
• Article 11: Optional for taxable persons with turnover below specified thresholds. They don’t charge VAT, can’t reclaim VAT on expenses, and file annual VAT declarations.
• Article 12: For non-registered companies making specific acquisitions or intra-community transactions with different compliance requirements.

2. VAT Compliance Procedures

Compliance with VAT regulations involves several procedures depending on the type of registration:

• VAT Returns (Article 10): Quarterly submission within six weeks after the end of each VAT quarter. Late submission incurs penalties.
• VAT Declarations (Articles 11 & 12): Annual submission by specified deadlines, with penalties for late filing.
• Notices of Payment of VAT (Article 12): Submission and payment deadlines for specific transactions.
• VAT Recapitulative Statements: Periodic statements summarizing intra-community sales, submitted to the European Union’s VAT Information Exchange System (VIES).

3. Mini One Stop Shop (MOSS) Registration

For providers of electronically supplied services to non-taxable persons in the EU, the MOSS scheme simplifies VAT payment across EU jurisdictions. Quarterly MOSS returns are required, facilitating VAT compliance for cross-border transactions.

4. VAT Grouping

Linked VAT-registered taxable persons in Malta can form a VAT group, subject to certain conditions. This allows them to be treated as a single taxable entity, streamlining VAT compliance procedures.

Conclusion

Understanding VAT regulations and compliance procedures is vital for smooth financial operations. At Expatax Malta, we offer comprehensive support and guidance to ensure your VAT compliance. From registration to submission of returns, our experts are here to assist you every step of the way.

For personalized assistance tailored to your specific needs, contact us today. Let us help you navigate the complexities of VAT and ensure your financial compliance with confidence.