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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 on expenditure in furtherance of his economic activity. The items listed by the Act that fall under this category are:

Export of goods, despatched or transported to a destination outside the European Community
The services of a broker or other intermediaries
Processing of moveable goods intended for re-export outside the community.
Goods in bond, supply by duty free shop and free-port activities

  • International transport of passengers, luggage and motor vehicles accompanying passengers and the supply of services relation to international transport of passenger.
  • The transport of goods which is directly connected with the export of those goods outside the community, or subject to customs duty suspension regime.
  • Customs formalities when these relate to importation into or exportation to outside the European Community, or in transit.
  • Provisioning and re-fuelling of ships and aircraft
  • Supply of goods and service including repairs etc., to ocean going ships and aircraft
  • Food except those supplied in the course of catering
  • Pharmaceutical goods
  • Supply of transport by the scheduled bus service
  • Scheduled inter island sea trips by authorised carriers
  • School transport supplied by an educational establishment or supplied to such establishments for the purpose of being provided by it as school transport and other school transport organised by a central office
  • Transport organised by an employer or by a central office for the transport of employees to and from work
  • Supply of gold to the Central Bank
  • Supply of goods for consumption on cruise liners where the place of taxation in terms of Item 3 of the Third Schedule is deemed to be in Malta.
  • Intra Community Supplies

There are also exempt without credit meaning that any input tax incurred in the process of providing such a supply cannot be recovered.

  1. Letting of immovable property but excluding
    • the letting or property licensed by the H.C.E.B.
    • the letting of property by a limited liability company to a person registered under article 10 for his economic activity.
    • licensed car parks
  2. Letting of permanently installed machinery and equipment
  3. Transfer of immovable property
  4. Insurance and related services
  5. Credit, banking and other services
  6. Investment Services
  7. Cultural and religious activities
  8. Sporting activities by non-profit making organisations
  9. Services by non-profit making organisations to their members
  10. Lotteries and all gaming activities, whether local or international
  11. Postal services
  12. Health and welfare
  13. Provision of welfare services including services in retirement homes
  14. The provision of education or educational researchprovided by any registered school and by non profit making organisations
  15. Private tuition by teachers except tuition in recreational, physical or sporting activities
  16. The activities of public radio and television bodies other than those of a commercial nature.
  17. The supply of water services by a public authority.