VAT Returns in Malta: A Complete Guide

In Malta, any person or business (individual or company) carrying out an economic activity that is not exempt without credit must generally register for VAT within 30 days of starting that activity. Failure to register on time can lead to significant administrative penalties. Companies that do not carry on an economic activity (e.g., pure holding companies with no trading operations) are typically not required to register for VAT.

VAT Returns in Malta – Key Facts

VAT returns in Malta must generally be filed by persons or businesses carrying out an economic activity that is not exempt without credit, with the type of VAT registration determining the filing obligations, VAT treatment and reporting deadlines.

• Service area: VAT Returns in Malta
• Jurisdiction: Malta
• Main legislation: VAT Act
• Tax authority: Commissioner for Tax and Customs
• VAT registration deadline: Generally within 30 days of starting an economic activity
• Who may need to register: Individuals or companies carrying out an economic activity that is not exempt without credit
• Who may not need to register: Companies not carrying on an economic activity, such as pure holding companies with no trading operations
• Main VAT registration types: Article 10, Article 11 and Article 12 registrations
• Article 10 registration: Full VAT registration for businesses required to charge VAT on taxable supplies and eligible to reclaim input VAT on allowable business purchases
• Article 10 VAT number: Issued with the “MT” prefix
• Article 10 VAT returns: Usually filed quarterly
• Article 11 registration: Small undertaking exempt registration for businesses below the applicable threshold
• Article 11 VAT treatment: Business does not charge VAT and cannot reclaim input VAT
• Article 11 VAT number: Issued without the “MT” prefix
• Article 11 declaration: Annual simplified declaration generally due by 15 March following the end of the calendar year
• Article 12 registration: Applies to certain intra-community acquisitions of goods or intra-EU services where VAT must be self-accounted in Malta
• Article 12 threshold: Intra-community acquisitions of goods exceeding €10,000 per year may trigger registration
• VAT return deadline: Article 10 VAT returns are generally due within 6 weeks from the end of the VAT period
• Standard VAT period: Usually 3 calendar months
• Recapitulative statements: May be required for Article 10 taxable persons making intra-EU supplies to VAT-registered customers
• Recapitulative statement deadline: Generally by the 15th day of the following month or quarter, as applicable
• Standard VAT rate: 18%
• Reduced VAT rates: 12%, 7% and 5% may apply to specific goods or services
• Zero-rated supplies: May include certain exports, intra-community supplies of goods, international passenger transport, and specific basic food and pharmaceutical items
• Exempt supplies: May include financial services, insurance, education, most healthcare and welfare, certain property rentals and public postal services
• VAT calculation basis: VAT is usually charged on the total consideration received or receivable, excluding VAT itself
• Late filing penalties: Administrative penalties may apply for late VAT returns, declarations or recapitulative statements
• VAT number transfer: VAT registrations are tied to the legal person and generally cannot simply be transferred to another person or buyer
• Record keeping: Businesses should retain VAT-related records and supporting documents in line with applicable requirements
• CSB Group support: VAT registration guidance, VAT return preparation, VAT compliance, recapitulative statement support, VAT advisory and assistance with communication with the Commissioner for Tax and Customs

Types of VAT Registration

There are three principal types of VAT registration in Malta under the VAT Act:

Article 10 (Full VAT Registration)

• Required when turnover exceeds applicable thresholds.
• Business must charge VAT on taxable supplies and can reclaim input VAT on allowable business purchases.
• VAT returns are filed regularly (usually quarterly).
• VAT numbers have the prefix “MT”.

Article 11 (Small Undertaking Exempt Registration)

• Available when annual turnover does not exceed the entry threshold.
• The business does not charge VAT and cannot reclaim input VAT on purchases.
• VAT numbers under Article 11 are issued without the “MT” prefix.
• Annual simplified declarations are required.
• Once registered under Article 10, you must normally remain under it for a minimum period (see below).

Article 12 (Intracommunity Transactions)

• Required for businesses not registered under Article 10 (or registered under Article 11) that make intra‑community acquisitions of goods exceeding €10,000 per year or receive intra‑EU services requiring VAT payment in Malta.
• VAT is to be self‑accounted on those transactions.
• Notices of payment must be submitted regularly for such transactions.

Entry & Exit Thresholds (Key Facts)

Malta’s VAT Act sets entry and exit thresholds for small undertakings:

• Goods: €35,000 entry / €28,000 exit This has been updated now – there are no longer entry and exit thresholds, but a single threshold of €35,000 for all goods and services
• Other services: €30,000 entry / €24,000 exit

If a business is below the entry threshold, it may elect Article 11 (exempt) rather than Article 10. Exit thresholds apply if an Article 10 registered person wants to switch to Article 11.

Switching registrations:

• Businesses under Article 10 must remain for a set minimum period before changing to Article 11 (often 24 months, subject to Commissioner approval and any changes from 2025 onward).

VAT Documentation & Returns

Filing VAT Returns

Article 10 Registered Businesses

• VAT returns for each VAT period must be submitted to the Commissioner for Revenue within 6 weeks of period end.
• A standard VAT period is three calendar months (quarterly), but a **12‑month VAT period may apply where annual turnover remains below the relevant exit threshold.
• Monthly VAT periods may also be assigned at the Commissioner’s discretion.

Article 11 Registered Businesses

• Submit an annual VAT declaration by 15 March following the end of the calendar year.

Article 12 Registered Persons

• Notices for intra‑community acquisitions and services liable for VAT must generally be submitted by:
  • 15 days after the end of the month for goods,
  • 1 month + 15 days after the end of the month for services.

Recapitulative Statements

Taxable persons under Article 10 who make intra‑EU supplies to VAT‑registered customers may need to submit periodic recapitulative statements summarising intra‑community sales directly to the EU’s VIES system. Deadline: by the 15th day of the following month/quarter as applicable.

Late Filing Penalties

Late submissions attract administrative penalties. For VAT returns, penalties typically start at EUR 20 or 1% of the VAT due per month (capped in certain cases). For recapitulative statements, penalties can be higher (e.g., €50 per month capped at €600 under current guidance).

How Long Does the VAT Department Take to Process Declarations?

Once you’ve filed your VAT return or declaration (whether quarterly or annual), the Commissioner for Revenue normally processes it within a reasonable administrative timeframe. Exact processing times can vary depending on workload and whether there are issues flagged in the filing — businesses are usually notified of any assessment adjustments or requests for clarification. Specific processing timelines are not always published by the VAT department and can depend on system or legislative changes.

In Malta, What Is Subject to VAT and What Is Exempt?

VAT Rates in Malta

Malta applies several VAT rates:

• Standard rate: 18% – Most goods and services.
• Reduced rates:
  • 12% – Certain financial and regulated health services, short‑term yacht hire (with conditions).
  • 7% – Licensed tourist accommodation, use of sporting facilities.
  • 5% – Electricity supply, confectionery items, printed matter, medical accessories, certain repairs, domestic care services, cultural admissions.
• Zero rate (0%) – Includes certain exports, intra‑community supplies of goods, international passenger transport, and basic food and pharmaceuticals in specific cases.
• Exempt supplies (no VAT charged and no input VAT recovery) – Typically include financial services, insurance, education, most healthcare and welfare, property rentals (with exceptions), and public postal services.

The VAT rate that applies depends on the type of good or service and whether special conditions or schedules in Maltese VAT law apply.

Common VAT Questions

How do I calculate the amount to charge VAT on?
VAT is usually charged on the total consideration received or receivable for a supply. This includes fees, commissions, packing, transport, insurance, and other charges related to the supply — but excludes VAT itself.

Do I need to re‑register if I add another activity?
You don’t usually need a new VAT registration just because you add another activity, provided the same legal entity carries it and the registration type remains appropriate. However, if the activity changes your turnover in a way that affects thresholds (e.g., pushing above a threshold), you must notify the VAT Department and may need to change registration type. Professional advice is recommended.

Can I use the same VAT number for a branch at another location, or must I register again?
A single VAT registration generally covers all business locations under the same legal entity in Malta. There is no need to register again for VAT simply because you have a different physical branch within Malta.

I plan to retire from business. Can I transfer the VAT registration number to my children or to a buyer?
VAT registrations are tied to the legal person. On the sale or transfer of a business, you cannot simply “transfer” the VAT number to another person — you would normally need to deregister and the new legal owner would apply for their own VAT registration (unless special legal arrangements apply).

Should services made outside Malta be included in the VAT return?
Services deemed to be made outside Malta may still need to be reported on a VAT return for input/output VAT calculation purposes, but whether VAT is due depends on the place of supply rules in the EU VAT Directive and Maltese VAT law. If the place of supply is Malta and VAT is chargeable, it is included; if not, it may not be reported as VAT due.