New Malta Regulations on VAT Grouping

The highly awaited Regulations on VAT Grouping in Malta will enter into force as of 1^st June 2018. Legal notice 162 of 2018 published on 22^nd May and titled Value Added Tax (Registration as a Single Taxable Person), allows for two or more persons established in Malta to form a group and apply to the Commissioner to be registered as a single taxable person.

VAT Grouping Scheme - Eligibility Criteria

In order for a group of persons to be considered for this scheme the following criteria must be met.

• At least one of the applicants is a taxable person operating in the financial services, insurance or gaming industries;
• Each of the applicants is bound to each of the other by financial links, organisational links and economic links; and
• At the time of application, all the applicants have submitted all returns of income due in terms of the Income Tax Management Act In addition the applicant would need to have settled in full any and all amounts due by way of tax declared in the aforementioned returns and notices, as well as any interest and administrative penalties due pursuant to the Act and the Income Tax Act and Income Tax Management Act.

The regulations specify that no person may be a member of more than one VAT Group at the same time. It adds that people having financial, organisational and economic links may only form part of the same VAT Group. The members of the VAT Group are required to nominate from amongst themselves the Group Reporting Entity. This role will exercise any and all rights and discharge any and all obligations arising to the VAT Group under the Act.

Registration of a VAT Group

Application for this scheme may be submitted electronically and must include information on the manner in which the applicants are bound to each other with the necessary links. Following receipt of an application the Commissioner shall register the applicants as a VAT Group subject that conditions specified in this Legal Notice are met. Once the commissioner is satisfied that the conditions in the said regulation are met, a notice in writing is issued to the applicant and the Group Reporting Entity. This notice will deem the applicant to be a member of the VAT Group with effect from the date specified in the said notice.

Should you wish to assess you eligibility or for assistance with application please contact us on [email protected] or +356 2557 2557.