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VAT

Malta has one of the lowest Value Added Tax (VAT) rates in Europe at 18%, making it an ideal jurisdiction for setting up a company.VAT is charged by the person providing the service or goods when the transaction is taking place.There are various VAT advantages related to yacht leasing in Malta. In fact, Malta is one of the EU jurisdictions offering substantial VAT reductions by means of lease structures.Another major benefit of Maltese VAT legislation is that when one provides his services to investment funds that are licensed elsewhere in the EU or outside the EU, he will not be subject to VAT in Malta. This is because the service would have occurred outside Malta.

Are there any exemptions from issuing fiscal receipts?

Yes, registered persons making supplies from a vehicle as door-to-door sales of bottled gas, milk, milk products and bread shall not be required to issue a fiscal receipt for each…

Can I apply to account for VAT on a cash basis?

Normally taxable persons are required to account for VAT on an accruals basis. However in the following cases the VAT department may allow the taxable person to account for VAT…

Can I claim input VAT on a purchase of a motor vehicle that I will use for my business?

VAT can be claimed on the purchase of a commercial vehicle that is used in the furtherance of your economic activity. Commercial vehicles are considered as such if these are…

Do I have to charge VAT when letting out an apartment?

Letting of property is exempt without credit which means that no VAT shall be charged on the rent. However there is an exception in the following cases: the letting or…

How can I change my VAT classification to that of an exempt person?

 A person registered under Article 11 can qualify as a small undertaking if the turnover for the relevant period falls below the Exit Threshold. Such a person will not be…

How can I determine if services obtained from EU countries are taxable in Malta?

Services are taxable either where the customer is established or where the supplier is established. It depends on what service is being received. The first step to determine the place…

How can I register for a VAT number ?

An application form can be obtained from the VAT department or downloaded from the VAT website. The application must be filled and submitted to the VAT department together with a…

How long am I obliged to keep a copy of my accounting records?

For VAT purposes a business is required to retain accounting records and documents for six (6) years.

I am a dealer in second-hand goods. Do I have to charge VAT on the sales?

A dealer in second hand goods may opt to charge V.A.T. on the difference between his selling and his cost price. The cost price taken into account would be the…

I am a mini-bus driver. Are all the sales related to school transport exempt from VAT?

The VAT Act stipulates that school transport organised by a central office is exempt with credit. If the transport is charged directly to the parents it is not exempt.

I am buying goods from the UK and re-selling them in UK. How shall I report these in the VAT return?

I have a company registered, managed and controlled in Malta. The trading activity consists of buying goods from the UK and re-selling them in the UK. The goods are not…

I am going to add a new trading activity . Do I need another VAT number?

A taxable person can have two different trading activities using the same VAT number. However one has to inform the VAT department in writing in the case of adding a…

I am going to register for VAT. How can I register as an exempt person?

Persons whose turnover is below the established thresholds for small undertakings can apply to be registered as an exempt person. The three applicable thresholds are: Category Entry threshold €  Economic…

I am going to sell my business as a going concern. Do I have to charge VAT on the stock and assets?

The transfer of such assets are deemed to be neither a supply of goods nor a supply of services if: the transfer is part of a transfer of the economic…

I am owed a refund from the VAT Department. When am I going to be paid?

When any excess credit for any tax period, cannot be set-off against output tax for the following period, than this excess credit has to be refunded within 5 months from…

My services are exempt without credit. Am I obliged to issue fiscal receipts to my clients?

Persons supplying such services that are exempt without credit such as doctors and teachers are not required to issue fiscal receipts for VAT purposes, but are still obliged to issue…

My services are exempt without credit. Do I have to apply for a VAT number?

No, persons supplying such services such as doctors and teachers are not required to register with the VAT Department.

What are my obligations as an exempt person?

A person registered under Article 11 is deemed to be an exempt person and will be provided with a VAT number without an MT prefix. An exempt person cannot charge…

What are the products that are exempt from VAT?

The VAT Act lists what products and services are exempt with credit and which are exempt without credit. Exempt with credit means that the taxable person may recover any VAT…

What are the VAT rates in Malta?

The VAT rates in Malta are: 18% on the taxable value of every taxable supply of goods, services or importation. 7% on accommodation supplies in premises licensed under the H.C.E.B.…

What expenses can I claim as input VAT?

Persons that are not registered as an exempt person and sell taxable or exempt with credit supplies may claim back input tax on expenditure. A person who sells a mixture…

What if I don't file the VAT return on time?

The VAT declaration has to be filed by the 15th day of the second month following the end of the tax period. Late filing of VAT declarations are subject to…

What information has to be included in a tax invoice?

A tax invoice has to include the following particulars: An identifying number of the invoice Date of supply Name, address and V.A.T. registration number of supplier Name, address and V.A.T.…

What is a recapitulative statement?

A recapitulative statement has to be completed and submitted to the VAT department by those persons involved in intra-community supplies. If you have not been involved in any Intra-Community transactions…

What is an intra-community acquisition?

Intra-community acquisition means the acquisition of the right to dispose as owner of goods, which are transported by or on behalf of the supplier or the person acquiring them from…

What is an intra-community supply?

Intra-Community supply means a supply of goods that are transported by or on behalf of the supplier or the person to whom the supply is made from a Member State…

What is false triangulation?

Normally triangulation is a term used in cases that involve the supply of the same goods between three different member states. If one of the three countries involved in the…

What is the procedure to install a point of sale system instead of my existing cash register?

A POS system is required to have a number of features which are laid out specifically in the VAT Act. The POS system has to be checked and certified by…

What is the reverse charge mechanism?

When a person makes an Intra-community acquisition of goods, the net value of the goods must be reported in Box 3, with the relative VAT due on such acquisition at…

What is triangulation?

Triangulation is a term used in cases that involve the supply of the same goods between three different member states. Triangulation means a sale from a taxable person in Member…

When do I have to issue a fiscal receipt instead of a tax invoice?

Every taxable person, whether he is exempt or not, who makes a taxable supply has to issue a fiscal receipt or a tax invoice. A taxable person (other than a…

Who is obliged to register for VAT purposes?

Any taxable person established in Malta shall apply to the Commissioner to be registered for V.A.T. purposes not later than 30 days from the making of any taxable supply or…