For Whom?
If you are a person performing an economic activity, you are considered as a taxable person.
Economic activity is defined as an activity carried by a person who is not an employee. Moreover, it consists of one or more of the below:
- Trade, profession, and provision of personal services.
- Exploitation of tangible or intangible property to generate income continuously.
- Provision by an association, club, or organization of advantage through a subscription basis or other considerations.
- Admission of persons to any premises for a consideration.
Under normal circumstances you must register for VAT under article 10. However, if your income does not exceed the threshold, you may register under article 11.
Persons based outside of Malta may also need to register for VAT in Malta if they are liable to pay VAT in Malta on a supply that takes place in Malta.
VAT Registration Types
ARTICLE 10
You must register for VAT under article 10 if you supply products or services and the annual turnover exceeds the establish threshold for exemption. You would be liable to charge VAT on your taxable supplies and claim VAT you incur as part of your taxable activities under certain conditions.
ARTICLE 11
You must register for VAT under article 10 if you supply products or services and the annual turnover does not exceed the establish threshold for exemption. You will not charge VAT on your supplies, and you cannot claim VAT you incur as part of your activities.
However, you may register under article 10 to charge VAT, and claim a deduction of the VAT incurred. Should you opt for this option, you must remain under article 10 for a minimum of thirty-six months.
ARTICLE 12
You must register for VAT under article 12 if you are a non-taxable legal person or a taxable person not registered under article 10, and you make intra-community acquisition of goods that do not exceed €10,000 since the start of the year.
Under this article, you must pay VAT in Malta each time you make intra-community acquisitions.
When and How Often?
The frequency of a VAT declaration submission depends upon the article the person is registered under.
Article 10: the VAT period allocated to a person is of 3 calendar months. The person must submit a VAT return for every VAT period by 1 month and 15 days from the end of the VAT period. The VAT return must be submitted to the Commissioner for Revenue.
Article 11: the VAT period allocated to a person is of 12 calendar months. The person must submit a VAT return to the Commissioner for Revenue by 1 month and 15 days from the end of the VAT period.
Article 12: the VAT declaration of intra-community acquisition of goods must be submitted to the Commissioner for Revenue by no later than 15 days from the end of the month in which the acquisition takes place. VAT declarations of purchases of services must be submitted to the Commissioner for Revenue by no later than 1 month and 15 days from the end of the month in which the service is received. Under both circumstances the person is liable to self-charge VAT in Malta.
Disclaimer: This article is only a summary of the guidelines for VAT registration and VAT declarations. This article is purely informational and does not replace the formal guidelines enforced by the authorities. Please refer to the full guidelines here: https://cfr.gov.mt/en/faqs/Pages/VAT/VAT-FAQs.aspx or get in touch with us for more information.