Malta VAT | Papilio Services Limited

Detailed information about the Malta VAT or the Malta Value Added Tax

Getting to grips with the Malta Value Added Tax rules for any particular country can take a good deal of head scratching and hard research before you are sure what you need to declare and where you can make valuable savings. Basing your business in Malta can, in fact, help you to reduce your running costs as their tax structure is geared towards promoting and encouraging companies to set down roots and contribute to the local economy.

Malta VAT at a glance

  • Malta VAT has a standard rate of 18% but there are two other lower rates of 7% and 5%.
  • The 7% rate is specifically aimed at the tourist industry on the island and relates to accommodation provided by hotels and other buildings that have been licensed for the trade.
  • The 5% rate applies to a wide range of services and products such as electrical power, mending of clothing and leather goods, artwork and antiques, and admission to tourist destinations such as concerts and museums. Other products and services are some confectionaries, items that are utilised exclusively by the disabled, and various printed goods such as ebooks.
  • There is also a 0% rate that applies to services and products such as transport, pharmaceuticals, exports, supplies and repairs involving aircraft and other vessels, and food.
  • There are certain areas that are exempt from VAT altogether including religious and cultural activities and insurance, banking and investment services.

Who Needs to Register what are the VAT rates in Malta?

If you are an established business in Malta then you will need to be VAT registered by the end of 30 days of making a taxable supply or an exempt with credit supply. If your business is outside Malta but goods are provided within the country you may be liable for paying value added tax and you will need to register also. Other concerns that need to be registered are if you have made an intra-Community acquisition in excess of €10,000.

Benefits for Business in Malta and Malta VAT

For many businesses the overall benefits for setting up a company in Malta include:

  • Lower corporate tax and other tax benefits
  • A well-educated and affordable workforce
  • A stable investment atmosphere
  • A lower VAT rate than many other European countries
  • A great strategic location in the central Mediterranean

With one of the lower rates of VAT in the European Union, Malta is fast becoming a welcoming place to set up a business for European and other international companies. There are a wide range of products and services that are either exempt with credit or exempt without credit that means many organisations can make significant savings if they play their cards right.

Many industries consider Malta VAT such as pharmacy, electronics and IT are beginning to see the benefits of using Malta as an operational base for their businesses. Malta is a multi-lingual country that has a strong and reliable workforce which is attractive to companies who want to set up business there. With the numerous financial advantages, including corporate tax breaks and manageable rates of VAT, the country has an excellent economic track record and offers a high standard of living for those who chose to reside there.