The Different VAT Rates in Malta

All economic activity in Malta is potentially subject to Value Added Tax (VAT). As a Member of the European Union, Malta is subject to the EU’s own guidelines on VAT compliance, but it reserves the right to issue its own VAT rates on an activity-by-activity basis.

With recent changes made to VAT rates as a result of the COVID-19 pandemic, being aware of the current VAT situation is beneficial. Here is the updated Firstbridge guide to understanding the different VAT rates in Malta.

Covid-19 VAT developments

Malta has introduced new VAT relief measures for medical services heavily linked to the Coronavirus until the 31st of December 2022. A reduced VAT rate of 5% applies for vaccines, in vitro diagnostic medical devices and other services linked to Covid-19. What’s more, VAT charged on protective face masks has been reduced from 18% to 5%.

See Legal Notice 4 of 2021 and Legal Notice 5 of 2021.

The Standard Rate

This rate currently stands at 18%.

This applies to all supplies of goods, services or importation that is subject to tax.

The Reduced Rate I

This rate currently stands at 7%.

It covers accommodation supplies licenced under the H.C.E.B. Act, mainly including hotel accommodation and sporting facilities.

The Reduced Rate II

This rate currently stands at 5%.

It generally affects:

• Various printed matter including newspapers, periodicals, books and e-books
• The supply of electricity
• Confectionery goods
• Clothing
• Household items
• Various medical accessories
• Household care services for vulnerable people including the young, sick, elderly or disabled
• Some cultural events and works of art
• Minor repairs including small alterations and mending of clothes, shoes, bicycles, and more
• Shoes and leather goods
• Certain medical equipment

The Zero Rate

As the name suggests, this rate is in fact 0%.

This includes an applied VAT exemption with a refund of tax being allocated. VAT exempt goods and services include:

• Some supplies of food products except for pre-cooked meals, highly processed dishes and pet food
• Prescribed medicine and pharmaceuticals
• Supplies of live animals used for yielding or producing food for human consumption
• Supplies of seeds and plants for food production
• Gold bars and ingots
• Intra-community and international transport of goods
• Services to goods and goods under Customs control

Where We Come In

The Firstbridge Team will be happy to help you maximise your company’s VAT compliance and efficiency.

Contact Firstbridge to set up a consultation at [email protected]

*This article has been prepared for general information on matters of interest only, based on information available to us up until the time of writing and does not constitute professional advice. You should not act upon the information contained in this article without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this article, and, to the extent permitted by law, Firstbridge does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this report or for any decision based on it.