VAT | KPMG | Malta



As a Member State of the EU, Malta's VAT system is harmonised with the EU VAT Directive.

As a Member State of the EU, Malta's VAT system is harmonised with the EU VAT Directive.

As a Member State of the EU, Malta's VAT system is harmonised with the EU VAT Directive. VAT is generally imposed on importations and intra-EU acquisitions of goods into Malta and on every supply of goods and services taking place in Malta for a consideration by a taxable person in the course or furtherance of its business.

Malta has the second lowest standard VAT rate in the EU of 18%. Reduced rates apply at 7% on the provision of tourist accommodations and at 5% on certain supplies including those of electricity, confectionery items, medical accessories, items for the exclusive use of the disabled, printed matter, certain works of art, collector's items and antiques, minor repairing of certain items, domestic care services and admission to cultural venues/events.

There is a considerable list of exempt supplies with and without credit.

VAT registration is generally required by businesses with taxable turnover above certain thresholds, businesses in receipt of taxable services from outside Malta or intra-EU acquisitions in excess of €10,000 per year and businesses engaged in intra-EU supplies of goods and services where such supplies are required to be reported in recapitulative statements. Businesses entitled to credits of Maltese input VAT may still elect to register for VAT even if they may not be obliged to.

Input VAT is recovered through the submission of VAT returns by means of a credit against output VAT. Excess credits are refunded. Persons not established in Malta could recover Maltese VAT through the procedures of the EU Directive 2008/9/EC or the 13th VAT Directive.

Malta has an attractive VAT system whereby the VAT payable on yacht purchases for private use is reduced progressively with the size of the yacht to as low as 5.4%. A similar arrangement applies on private aircraft purchases whereby the effective VAT charge is dependent on the specifications of the aircraft with the minimum charge being 5.4% of the aircraft's value.

Relief from VAT may apply on a transfer of businesses as a going concern.

VAT Treatment of Long-Term Yacht Leasing

The VAT Yacht leasing Guidelines set out the VAT due on short-term leasing arrangements.

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Key Contacts

VAT relief on Transfers of a Going Concern

No VAT is due on a sale of a business as a going concern, if certain conditions are met.

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Input VAT recovery on improper purchase invoices

On 8 May 2013, the Court of Justice of the EU (CJEU) has released its judgement...

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