MGA’s New Streamlined Tax & Fee Structure | KPMG | Malta

MGA’s New Streamlined Tax & Fee Structure

MGA’s New Streamlined Tax & Fee Structure

What you need to know about the legal and regulatory framework applicable to gaming activities in Malta.


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What You Need To Know

On the 12th July 2017, the Malta Gaming Authority (MGA)published a White Paper launching a consultation process inconnection with an overhaul of the current legal and regulatoryframework applicable to gaming activities in Malta. The majorreforms being proposed aim to repeal all existing legislationand replace it with ‘The Gaming Act’, a singular primary Act tobe complemented by subsidiary legislation covering key areasof regulation and various regulatory directives and guidelines.The current ‘multi-licence’ system will be replaced with asystem comprising two different types of licences – a B2Clicence and a B2B licence, thereby addressing the increasedproduct and technology convergence between online andland-based gaming.

The new licensing gaming duty framework streamlinestaxation into one flow with two main layers; licence feesshall be made up of fixed (License Fee) and variable parts(Compliance Contribution).

The new structure is particularly attractive to B2Bs, who willbenefit from significant fiscal incentives. Start-ups are alsoset to benefit greatly from the new structure with a twelvemonthmoratorium on Compliance Contribution for start-upsfulfilling the criteria considered in the Gaming Licence FeesRegulations, making it easier for them to increase theiroffering and innovate.

A fixed Licence Fee for Type 1, 2 and 3 of €25,000 shall falldue every twelve months, in advance, operators providingsolely controlled skill gaming services (Type 4) are subjectto a fixed Licence Fee of €10,000. The variable component,known as ‘Compliance Contribution’, is calculated accordingto gaming revenue, further varied depending on gaming type.Gaming types shall be four, and each type has been allocateda sliding scale of variable licence fees that will be due inaddition to the aforementioned fixed licence fee.

The fixed License fee for Class 4 Licensees (B2B Operators)has increased from the €8,500 under the current regime to afee range of €25,000 to €35,000 per annum, depending on thelevel of revenues earned over a year under the new regime.However, under the New Licence Fees Regulations, Class 4licensees will no longer be required to pay a monthly gamingtax, ‘Compliance Contribution’, for every operator they supplylicensed in an EEA jurisdiction (other than Malta) or anotherjurisdiction.

Gaming types shall be four, pursuant to the Gaming License Fees Regulation 2017, as can be seen here.

There will be a transitory period between 1 January 2018and 30 June 2018, both dates included, for current licenseesto continue paying in accordance with the current legalframework until 30th June 2018. New licensees will besubject to the requirements of the new taxation frameworkduring the transitory period.

A reconciliation will be carried out for all current licensees tocalculate the difference between the fees paid under the oldregulations for the first six months of 2018 and the fees tobe paid for the remaining six months under the new regime.Class 4 licensees (B2B License) will receive a credit for thegrand total of dues they incur in excess of the provisionsof the New Licence Fees Regulations during the transitoryperiod.

Excess amounts provisionally paid shall be carried forward andavailable for set-off against any amount payable in terms ofthe Regulations for reference months July 2018 to December2018 and any subsequent licence period.



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