EMD is an established multi-disciplinary firm based in Malta providing legal, tax, advisory and corporate services. The advisory arm of the firm provides services relating to company incorporation and administration services, tax consultancy and compliance as well as accounting and book-keeping services.
The general VAT rate in Malta is by default 18% for all goods and services falling within the scope of VAT and which do not qualify for reduced rates of 5% or 7% or are zero-rated.
The 5% reduced rate is applied to the following:
- The supply of electricity;
- Confectionary and similar items (as per HS codes listed in the 8th Schedule to the VAT Act);
- Medical accessories (as per HS codes listed in the 8th Schedule to the VAT Act);
- Printed matter (as per HS codes listed in the 8th Schedule to the VAT Act);
- Items for the exclusive use of the disabled (as per HS codes listed in the 8th Schedule to the VAT Act);
- The importation of works of art, collectors’ items and antiques;
- Minor repairs of bicycles, shoes, leather goods, clothing, and household linen;
- Domestic care services such as home help and care of the young, elderly, sick or disabled; and
- Admission to museums, art exhibitions, concerts and theatres.
The 7% reduced rate is applicable on both the letting of or the provision of accommodation in premises requiring a licence as stipulated in the Malta Travel and Tourism Services Act and the provision of sporting facilities.
Timing of payments or deposit
Payment is due to the VAT Department no later than the date on which taxpayers are required to submit their VAT return for a tax period, in an amount equal to the excess, if any, of the output VAT for that period over the allowable input VAT deductions. Any excess tax credit brought forward from a previous tax period that has not yet been refunded shall be allowed as a credit against the VAT due.
Methods of payment or deposit
Payments can be made either by cash, cheque or bank transfer. Payment can be made through the Department’s electronic portal at: http://www.vat.gov.mt/en/Online-Services/Pages/VAT-Online-Services.aspx
Interest and penalties for late filing and late payment of VAT due
The submission of such returns helps with the maintaining of records regarding information that covers arrivals and dispatches of goods to and from Malta and the Member States of the European Union only.
An annual supplementary information threshold for the arrivals and dispatches of goods to and from Malta and the Member States of the European Union is to be established in respect of each calendar year. Traders and enterprises whose value of annual gross merchandise arrivals and dispatches of goods to and from Malta, falls below this threshold, will be exempt from providing supplementary information about their transactions. On the other hand, traders and enterprises whose value of annual gross merchandise arrivals and dispatches of goods to and from Malta, exceeds the said established threshold, will have to provide regular information about their transactions.
The information in respect of arrivals and dispatches must be submitted to the Supplementary Information Collection Offices at the Customs Department on the appropriate forms which can be procured either from the Department of VAT itself or from the Supplementary Information Collection Offices at Customs Department, Valletta or at Customs Section at the Malta International Airport.
Traders using Courier service or Postal service are obliged to fill in the Supplementary Declaration within 24 hours of receipt of the goods.
Information on merchandise arrivals and dispatches are required to be submitted either by the trader, the enterprise, or by an authorised agent acting on behalf of traders and enterprises. In the latter case, traders and enterprises are required to inform the Commissioner of VAT through the Supplementary Information Collection Offices at the Customs Department, of their appointed authorised agent.
Taxable persons not established in the EU Member State of Refund but established in another EU Member State
A claim for a refund under the 8th Directive is made by a taxable person not established in the Member State of VAT refund but established in another Member State, through the website of the tax administration of the Member State where he is established.
The refund application is submitted to the Member state of establishment at the latest on 30thSeptember of the calendar year following the refund period. The applicant is immediately informed, by electronic means, of the date on which the application is received by the local tax authorities. The tax authorities will notify the applicant of the decision to approve or refuse the refund application within 4 months from the date of receipt.
Approved refunds will be paid at the latest within 10 working days of the expiry of the above mentioned applicable deadline.
Taxable persons not registered in the territory of the EU Community
A claim for a refund under the 13th Directive is made by a taxable person established outside the European Community, and not registered for VAT in Malta, on the prescribed form, which includes notes on how to complete the application,. The claim shall be submitted to the VAT department in Malta, within 6 months from the end of the calendar year in which the tax became chargeable.
Decisions concerning applications for refund shall be given within 6 months from the date when the applications, accompanied by all the necessary documents required under these regulations for the examination of the application, are received by the Maltese tax authorities.