Value Added Tax (VAT)
The general VAT rates to be charged by Maltese operating companies stand at 18%. Other lower rates are also possible depending on the economic activity of the company.
Certain industries such as the gaming industry, can also operate without charging VAT, if they satisfy certain criteria as prescribed in the VAT Act of the laws of Malta. On the other hand, those operating within the hospitality industry and provide short let accomodations are allowed to charge VAT at the rate of 7%.
Three distinctive Articles (A10, A11 & A12) in the VAT Act, determine if the company should be registered or not for VAT. The Maltese VAT Act, allows a great number of companies to deduct the VAT it incurred on its economic activity and reduces the cost of the expenses incurred.
Furthermore, Maltese companies registered for VAT purposes under Articles 10 & 12 can apply for the Reverse Charge Mechanism when doing intra community trade. Hence, if a Maltese company purchases goods from another member state of the European Union, it neither pays VAT outside of Malta nor in Malta.
Lastly, companies registered under Articles 10 are allowed to deduct the input VAT incurred and end up paying less output VAT.
To learn more about the possible VAT registrations, click on the below links: -