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

This rate currently stands at 5%. It generally affects:

1. Various printed matter including newspapers, periodicals, books and e-books
2. The supply of electricity
3. Confectionery goods
4. Clothing
5. Household items
6. Various medical accessories
7. Household care services for vulnerable people including the young, sick, elderly or disabled
8. Some cultural events and works of art
9. Minor repairs including small alterations and mending of clothes, shoes, bicycles, and more
10. Shoes and leather goods
11. Certain medical equipment