How Malta’s Gaming Tax Changes Will Affect iGaming Companies

Malta has been the world’s go-to jurisdiction for online gaming licensing since it passed the Remote Gaming Regulations in 2004 — the first framework of its kind in the EU. Today, with roughly 700 licensed operators and a sector that contributes an estimated 12% of GDP and employs over 10,000 people on the island, Malta’s regulatory decisions carry real weight across the global industry. The changes coming on 1 October 2026 are no exception.

The reform is based on Legal Notice 84 of 2026, which amends the Gaming Tax Regulations, andLegal Notice 86 of 2026, which amends the Fifth Schedule to Malta’s VAT Act. Both were published in the Government Gazette on 1 April 2026. Together, they represent the most significant reshaping of Malta’s gaming tax and VAT framework in years. The Malta Gaming Authority and the Malta Tax and Customs Administration have framed the reform as a move toward greater clarity, competitiveness and regulatory certainty.

For iGaming companies, the main issue is not simply “more tax”. The more important change is that Malta is narrowing the VAT exemption for gambling services. This may affect VAT treatment, input VAT recovery, pricing, systems, reporting and how certain services are classified. The MGA and MTCA have explicitly identified a “natural right of recovery of eligible input VAT costs” as one of the intended effects of the reform. In other words, for some operators, moving from exempt to taxable could actually improve the economics.

The VAT exemption is getting narrower

Under EU VAT law, gambling services have historically enjoyed a broad exemption, rooted in Article 135(1)(i) of the EU VAT Directive. Malta applied this with a fairly wide brush. Legal Notice 86 of 2026 narrows it.

From 1 October 2026, the VAT exemption without credit is expected to apply only to a limited set of activities. Deloitte, KPMG and PwC all report that the remaining exempt categories are expected to include low-risk games, approved occasional junket events and in-venue betting at sports events.

What this means in practice is that a significant portion of online gambling and betting services that previously sat comfortably inside the VAT exemption may now become taxable, where the supply is deemed to take place in Malta. And here is where the picture becomes more nuanced than a straightforward cost increase.

Under the old framework, operators providing exempt supplies were largely unable to recover the VAT they paid on their own business expenses. That unrecovered VAT quietly sat inside operating costs: on technology, software, marketing, professional fees, staffing and everything else. The MGA and MTCA have explicitly identified a “natural right of recovery of eligible input VAT costs” as one of the intended effects of the reform. In other words, for some operators, moving from exempt to taxable could actually improve the economics.

Under the consolidated structure, the new rates are straightforward. Remote gaming operators will pay 15% on Type 1 game revenue and 10% on Type 2, 3 and 4 game revenue, where players are resident in Malta. Gaming conducted within a controlled premises or qualifying junket events attracts a lower rate of 5%. For operators running studios in Malta for filming or broadcasting gaming services, the annual Studio Broadcasting Levy rises from €500 to €3,000. Taken together, the new structure trades complexity for clarity — fewer moving parts, more predictable liabilities.

Input VAT recovery: the opportunity inside the reform

This is the part that tends to get buried in the legal detail, but it deserves direct attention. For operators whose services become taxable in Malta, the reform could open up meaningful VAT recovery on costs that were previously stuck.

Areas where improved recovery could be commercially relevant include:

Whether this amounts to a genuine saving or a marginal improvement depends heavily on the individual business. A company with lean local costs and a predominantly international player base will have a very different calculation from one with substantial Malta-based operations and high technology spend. The direction of travel, however, is deliberate policy: Malta wants its gaming framework to reflect how modern iGaming businesses are actually structured.

Gaming tax: consolidation replaces complexity

Legal Notice 84 of 2026 addresses the gaming tax side of the reform. The MGA and MTCA are consolidating the existing gaming tax and gaming device levy into a single gaming tax structure, classified by game type and mode of offer.

One important point that operators should not overlook: the revised gaming tax framework applies exclusively to gaming services provided within Malta. Malta-licensed operators running international operations should not assume that the entire business is affected uniformly. The location of the player, the type of game and the applicable place-of-supply rules will all factor into the analysis. Under the EU’s post-2015 B2C digital services rules, where a consumer is located determines where VAT falls, and that logic carries over into how these changes interact with cross-border operations.

A comparison of the key changes

What companies should review now

Operators should not wait until late 2026. The Malta Gaming Authority (MGA) and MTCA held an information session in April 2026 specifically to explain the legislative changes, clarify practical application and help stakeholders prepare before the rules enter into force.

The most sensible review areas are VAT classification, input VAT recovery, player location logic, invoicing flows, ERP and reporting systems, supplier contracts, group recharges and partial exemption calculations. For larger operators, this should not be treated as a simple accounting update. It may affect commercial pricing, financial forecasts and tax governance.

What this reform signals about Malta’s direction

For all the technical complexity, the policy intention behind this reform is fairly clear. Malta is trying to move its gaming tax framework away from broad, blunt exemptions toward a more structured and commercially rational model — one that acknowledges how iGaming businesses actually operate and where their real economic activity sits. That is broadly good news for the industry, even where it creates short-term compliance work.

Malta’s appeal as a licensing jurisdiction has always rested on more than just its gaming licence: the regulatory environment, the available talent, the tax framework and the island’s broader connectivity to EU markets all play a role. A more coherent VAT framework is a step in the right direction, provided operators take the time to understand their individual position before the rules come into force.

Dislaimer

This article is for general information only and does not constitute tax or legal advice. Operators should obtain specific professional advice based on their own circumstances. The reform is based on Legal Notice 84 of 2026 and Legal Notice 86 of 2026, published in the Government Gazette on 1 April 2026.

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