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Our experienced indirect tax team can assist you with any advice required in relation to VAT procedures & VAT treatment of particular economic transactions.
VAT Advice & Assistance
The team can assist you through the VAT registration process, guiding you through the different types of VAT registrations possible, and ensuring the VAT number is obtained within the shortest possible timeframe.
CSB Group can also assist you with the compilation and submission of the necessary VAT related documents, ensuring that periodic VAT returns and other required submissions are duly completed and filed appropriately with the relevant authorities in a timely manner. CSB Group can also represent the company with the VAT authorities who can, at their discretion, request meetings with the company directors to obtain further information about the company’s activities. In the case of a VAT inspection, we can also assist our clients by liaising with the VAT authorities and providing the appropriate records as necessary.
Any person (individual or company) who carries on an economic activity is considered a taxable person and is required to register for VAT within 30 days from commencement of the economic activity. Failure to register in time will result in hefty administrative penalties. Companies which do not carry on an economic activity (such as pure holding companies) are not required to be VAT registered.
Types of VAT Registrations
The VAT Act allows for three different types of registrations for VAT, as follows :
Article 10 of the VAT Act
A taxable person whose annual turnover exceeds the entry thresholds as per table below is required to register under Article 10 of the VAT Act. Taxable persons registered for VAT under Article 10 must charge VAT on their taxable supplies of goods or services, may claim back VAT incurred in the course of their taxable activities, and need to file quarterly VAT returns. In making taxable supplies the taxable person is required to issue tax invoices / fiscal receipts including all necessary details as specified in the VAT Act, and must keep record of all invoices on which VAT is being claimed back (these must show the taxable person’s VAT number). A person carrying out mixed supplies is also obliged to register under Article 10 of the VAT Act.
Article 11 of the VAT Act
A taxable person whose annual turnover does not exceed the entry thresholds as per table below may opt to register under Article 11 of the VAT Act (the taxable person may still opt for Article 10 registration). Taxable persons registered for VAT under Article 11 do not charge VAT on their taxable supplies of goods or services, will not be able to claim back VAT incurred in the course of their taxable activities, and need to file an annual VAT declaration. The taxable person is still required to issue tax invoices / fiscal receipts including all necessary details as specified in the VAT Act.
Article 12 of the VAT Act
A company not registered for VAT (which do not carry on an economic activity) or a taxable person not registered under Article 10 making intra-community acquisitions of goods exceeding €10,000 in value (over a calendar year) must register under Article 12 of the VAT Act and pay VAT on these acquisitions. Companies / taxable persons registered under Article 12 need to submit Notices of Payment of VAT whenever they receive any services from the EU / outside the EU or whenever they make intra-community acquisitions of goods. Moreover, on an annual basis they must file a declaration.
Up until 31st December 2017 most gaming companies were registered under Article 12. Effective 1st January 2018 there were significant changes in this respect. For more details please refer to the article on New VAT Guidelines on Gambling and Betting.
The thresholds as mentioned above are as follows:
|Category||Entry threshold||Exit threshold
|Economic activities consisting principally in the supply of goods||€35,000||€28,000|
|Economic activities consisting principally in the supply of services with a relatively low value added||€24,000||€19,000
|Other economic activities||€20,000||€17,000
As explained above, a taxable person whose annual turnover does not exceed the entry thresholds may opt to register under Article 11. The exit thresholds apply in cases where a taxable person registered under Article 10 wishes to change their registration to Article 11.
VAT Compliance Procedures
VAT Returns (for Article 10 registrations)
must be submitted within 6 weeks following the end of each VAT quarter. Failure to submit a VAT return by the deadline will result in a monthly administrative penalty equal to the higher of:
- €20; and
- 1% of the VAT amount due to the authorities as recorded in the VAT return.
Where the VAT payable is less than €250, this administrative penalty is capped at the amount of the tax payable or €50 per VAT return, whichever is greater.
If in any VAT quarter input VAT exceeds output VAT, any excess will be refunded back to the taxable person. If output tax exceeds input VAT, then the VAT payable will need to be paid to the authorities by the VAT return submission deadline. Failure to pay will result in interest being incurred at a rate of 0.54% per month.
VAT Declarations (for Article 11 & 12 registrations)
Must be submitted by 15th March and 15th February respectively following the end of the calendar year. Failure to submit a VAT declaration by the deadline will result in a monthly administrative penalty equal to €10, capped at €120 per declaration.
Notices of payment of VAT (for Article 12 registrations)
VAT FORM 004 / 2010 – The form together with payment shall be furnished to the Office of the Commissioner for Revenue by not later than the 15th day of the second month next following either the date of the invoice or of the month during which the service is received whichever is the earlier. .
VAT Recapitulative Statements
Taxable persons registered under Article 10 may also be required to periodically (monthly / quarterly) submit statements summarising the intra-community sales directly to the European Union’s VAT Information Exchange System (VIES). These statements are applicable when a taxable person supplies goods or services to taxable persons in the EU with a valid VAT number, with the place of supply being where the customer is established. If this statement is required to be submitted in a particular quarter, it must be done by the 15th day of the month following the relative calendar month / quarter.
Mini One Stop Shop (MOSS) registration and compliance
When taxable persons provide electronically supplied services to non-taxable persons in the EU, the place of supply is shifted to where the customer is established. In cases where the taxable person providing the services is not, or would like to avoid being, registered for VAT in the country where the customer is established, they may opt for the MOSS scheme to facilitate the payment of VAT in the respective EU jurisdictions where their customers are established. This scheme is available to taxable persons established both inside and outside the EU.
The taxable person is required to submit a MOSS return electronically on a quarterly basis, to the Member State of identification within 20 days from the end of the relevant quarter. The payment of any VAT is also required by this date. CSB Group can assist with this registration, as well as with the submission of the periodic MOSS returns.
Any two or more VAT registered taxable persons established in Malta who are linked to each other (through defined financial, economic, and organisational links) may be, subject to certain conditions being met, treated as a VAT group and registered as a single taxable person. For the application to be successful, at least one of the companies must be a licensed or recognised in terms of legislations specified in the regulations. CSB Group can assist with the VAT Grouping application process, as well as the subsequent VAT compliance procredures.
The above is subject to changes, as well as certain exemptions and exceptions to the general rules.
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