Under LN162 of 2018 – Single Taxable Person Regulations 2018, it is possible certain qualifying entities to form or join a VAT Group and be recognised by the VAT Department as a Single Taxable Person. The purpose of these regulations are to enable such entities forming part of a group of companies to register as a single taxable person rather than having multiple VAT numbers throughout the group.
Advantages that such regulations bring to the VAT Group include the reduced administrative and cash flow burden to the group and the possibility of reducing the VAT cost to the group. Supplies within the group are out of scope of VAT and therefore no VAT is chargeable on such transactions between group companies.
There are a number of qualifying conditions the most significant being that at least one of the applicants must be licenced/recognised under one of the following Acts:
- Banking Act
- Financial Institutions Act
- Gaming Act
- Insurance Business Act
- Insurance Distribution Act
- Investment Services Act
- Retirement Pensions Act
- Securitisation Act
All applicants must be bound by financial, organisational and economic links as defined in the regulations and be in good standing with the Inland Revenue at application. Such applicants may only form part of one VAT group at the same time.
Place of supply of electronically supplied services
Under LN297 of 2018 there has been a change to the place of supply to non-taxable persons of telecommunication services, radio and television broadcasting services and electronically supplied services in certain instances in order to relieve the burden of VAT compliance from micro-businesses transacting across a number of member states.
The place of supply to a non-taxable person of telecommunication services, radio and television broadcasting services and electronically supplied services does remain the place where such person is established, has his permanent address or usually resides. However this shall not apply if the following conditions are met:
- The supplier is established in Malta
AND - Services are supplied to non-taxable persons who are established in a member state excluding Malta;
AND - The supplies of such services do not exceed Eur10000 in the current calendar year and neither in the preceding year.
Once the threshold is exceeded the default place of supply rule for such services will apply from such time.
Suppliers falling below the threshold may still opt, in the manner prescribed in the regulations, to use the default place of supply rules which right shall be granted by the Commissioner and cover two calendar years.
MOSS – Exemption from issue of VAT fiscal receipts
As from 2019 entities identified in Malta as providing telecommunication, broadcasting and electronically supplied services through MOSS are exempt from having to issue fiscal receipts.