For a company to be registered as an e-commerce business in Malta, one must follow the legal and regulatory steps. Here’s a summary of what is needed as a business owner:
Have you Registered the Company in Malta?
The initial step to open an e-commerce company like any other company in Malta is to register the company with the Malta Business Registry (MBR). The company must have a registered office in Malta. In the process of registering the company, you would need to obtain a Tax Identification Number (TIN) from the Malta Tax & Customs Administration (MTCA), this is a requirement for tax purposes.
Is a License Required?
Whilst most activity within the e-commerce sector is not deemed a licensable activity, companies that have activity captured under the Investment Services Act and the Malta Gaming Act would need to be licensed as they are carrying out regulated activity. This should be clarified in the initial planning stages of setting up your business.
Is Value Added Tax (VAT) Registration Required?
This might be one of the biggest concerns for new companies, as to understand the VAT treatment, one would need to understand if the economic activity of the business is captured by Value Added Tax (VAT) legislation. The business would also have to identify what type of customer they are selling to and then assess the place of supply. A key consideration owing to different VAT treatment would be whether the business is supplying a service or is selling goods and also if the supply is deemed an Electronic Supplied Services (ESS) as each has different VAT permutations.
Some situations may require VAT registration in multiple jurisdictions depending if certain thresholds are exceeded or place of supply rules suggest so. However, there are simplification methods such as the Mini-One Stop Shop (MOSS) which allows for registration in one EU member state, giving you the benefit of submitting one report on a quarterly basis for activity in all the EU member states rather than having to register for VAT in every member state a sale was made and reporting in each one.
Did You Open a Business Bank Account?
A business bank account will need to be opened to separate personal and business accounts. The bank account will make the process easier for your accountant, as any sales made and/or purchases paid can be tracked from the business bank account.
Do I Need to Issue Invoices?
As per EU rules an invoice is required for both business-to-business (B2B) and business-to-consumer (B2C).
Information Required on a VAT Invoice
- Date of issue
- Sequential number
- Supplier’s full name and address
- Customer’s full name and address
- Supplier’s VAT number
- Customer’s VAT number (if any)
- Description and quantity of goods or services
- Unit price of goods or services (excl. VAT)
- VAT rate applied
- Breakdown of VAT amount
How Can We Help?
We can assist different types of e-commerce businesses, and our company has helped many clients set up and succeed. These include sellers on e-commerce merchant platforms, drop shippers, software developers, and IT consultancy to name a few. We can help make your e-commerce business tax efficient and compliant with all legal, tax, and compliance regulatory obligations. If you are thinking about registering a company in Malta, specifically an e-commerce business, and are interested in having an initial call to discuss your situation contact us today to arrange a consultation to discuss your e-commerce business requirements.
About the Author
This article has been authored by Chanelle Mifsud, Manager of the Accounts Department.
