1. VAT Registration

VAT registration is crucial for individuals or companies engaging in economic activities. Failure to register within 30 days from the start of an economic activity could results penalties. Companies not involved in economic activities, such as pure holding companies, are not required to register for VAT. Below are the different types of VAT registrations and their conditions:

 

1.1    Article 10

1.1.1   Registration Conditions

 

Article 10 registration is applicable to taxable persons whose annual turnover exceeds the specified entry thresholds (below). Those persons registered under Article 10 must charge VAT on their taxable supplies of goods and/or services. Additionally, persons carrying out mixed supplies must also register under Article 10. Taxable persons registered under Article 10 may reclaim input VAT incurred during their taxable activities.

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1.1.2   Compliance Requirements

 

Article 10 registered persons are required to file quarterly VAT returns which must be submitted within 6 weeks following the end of each VAT quarter (by the 15th of the second month following the end of the VAT period, extended to the 22nd for online submissions and payments). Taxable persons must also issue invoices or fiscal receipts with all necessary details and maintain records of invoices from which they are claiming input VAT. Late submissions result in a monthly administrative penalty of €20 or 1% of the VAT due, with a capping based on the VAT payable. Late payments incur an interest rate of 0.6% per month.

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1.1.3 VAT Recapitulative Statements

 

Taxable persons registered under Article 10 may also be required to periodically submit statements summarising their intra-community sales. These statements are applicable when a taxable person supplies goods or services to other VAT registered taxable persons in the EU, provided the VAT number is valid. If required, these statements must be submitted by the 15th day of the month following the relevant period (which would be quarterly or monthly). Late submissions will result in administrative penalties of €50 monthly, not exceeding €600, for each statement.

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1.2   Article 11

1.2.1  Registration Conditions

 

Taxable persons whose annual turnover does not exceed the specified entry thresholds (as per section 1.1.1 above) may opt to register under Article 11 of the VAT Act. Taxable persons registered under Article 11 do not charge VAT on their taxable supplies of goods or services and cannot reclaim VAT incurred during their taxable activities. Their supplies may only be made to local customers. Taxable persons qualifying for Article 11 registration still have the option to choose to register under Article 10 if preferred.

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1.2.2  Compliance Requirements

 

Article 11 registered persons are required to file an annual VAT declaration and issue fiscal receipts with all necessary details as specified in the VAT Act. Failure to submit a VAT declaration by the deadline (by the 15th March of the following year for annual declarations) results in a monthly administrative penalty of €10, capped at €120 per declaration.

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1.3   Article 12

1.3.1  Registration Conditions

 

Companies not engaged in economic activity or taxable persons not registered under Article 10 but making intra-community acquisitions of goods exceeding €10,000 annually, or intra-community services must register under Article 12 of the VAT Act and pay VAT on these acquisitions.

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1.3.2  Compliance Requirements

 

Persons registered under Article 12 must submit Notices of Payment of VAT whenever they receive any services from the EU or outside the EU or make intra-community acquisitions of goods. They are also required to file an annual declaration. The Notices and payment are due by the 15th day of the second month following the invoice date or the month during which the service is received, whichever is earlier. Failure to submit a VAT declaration by the deadline (by the 15th March of the following year) results in a monthly administrative penalty of €10, capped at €120 per declaration.

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2. One Stop Shop Registration and Compliance

Taxable persons providing cross-border services or distance sales of goods to non-taxable persons in the EU can opt for the One Stop Shop (OSS) scheme to simplify VAT compliance. This scheme shifts the place of supply to the customer's location, allowing businesses to avoid multiple VAT registrations in different EU countries. OSS returns must be submitted electronically on a monthly or quarterly basis, depending on the scheme, to the Member State of identification, within 20 days from the end of the relevant reporting period, with VAT payments also due by this date.

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3. VAT Grouping

VAT grouping allows two or more VAT-registered taxable persons established in Malta and linked through financial, economic, or organisational connections to be treated as a single taxable entity for VAT purposes. This mechanism can simplify VAT compliance by enabling transactions between group members to fall outside the scope of VAT, eliminating the need to account for VAT on intra-group supplies.

 

To qualify for VAT grouping in Malta, the entities must demonstrate the required connections, and at least one member of the group must be licensed or recognised under specified legislation, such as financial services, gaming, or insurance regulations. VAT grouping is particularly beneficial for businesses operating within sectors where such connections are common, as it can reduce administrative burdens and improve cash flow efficiency.