Value Added Tax, in 1995, was implemented in Malta, and all the services and goods imported by Maltese Companies were subjected to this tax. It obligates every individual or business entity involved in any economic activity to observe and follow the newly introduced taxation rules.
Vat Calculator Malta (2022)
Our calculator will automatically detect Malta’s vat rate when you select your country. you may also edit the default rate by entering your rate.
The Thresholds eligibility in Malta:
There are three categories of the threshold for exiting and entering a particular level of Vat according to the supply of items and goods. Entering and exiting the minimum and maximum amount to enter or exit, respectively.Economic Activities comprising goods and items:
- 28000 – 35000
- 19000 – 240000
- 12000 – 14000.
To make math easy and quick for you, we have generated a VAT calculator for Malta that will surely help you in calculations through the process.
The Legislation of VAT in Malta:
The tax rate has undergone several changes since 1995. However, we notice a significant difference when Malta became a part of the European Union. Since then, Malta’s legislation is under the shadow of the EU’s Council Directive for taxes. The Comptroller of Customs is responsible for the collection of taxes and regulating the rules regarding VAT.
According to the prevailing rules system, there are three ways of getting registered to VAT. They are:
1 – A person or business entity supplying goods or providing services of any nature reaches the established exempt threshold is designated according to Article 10 of VAT legislation. This Article 10 would allow you to charge VAT on your supplied items and claim back the paid VAT.
2 – A person or business entity providing goods and services but does not reach the established threshold would register accord to Article 11 as VAT exempt. In this case, you cannot charge VAT on your sales or services, neither can you claim VAT expenses incurred to you. The only way to tackle this situation is to opt for Article 10 registration. If you continue to stay under this registration for thirty-six months, only then would you be able to charge VAT and claim back VAT in Article 11 registration. With the fact, your turnover hasn’t reached the established threshold yet.
3 – A person, who is a non-taxable identity or a non-registered taxable identity and is involved in any intra-community acquisition of goods worth more than €10,000, would be liable to register under Article 12. The intra-community acquisition means the disposal of rights as the owner of products transported and supplied between the EU Member States. In this case, the legislation requires you to register to Article 12 even if you are registered as Article 11 exempted identity. This sums up to two options:
- If your turnover of goods transported to member states is less than 10,000, then you can charge your home-country VAT rate to all the inter-community supplies.
- If your turnover becomes higher than 10,000, then the VAT rate would be according to your supplier’s country rule.
VAT in Malta works on four different levels:
The standard and applied to most of the item’s rate is 18%. The other three levels are 7%, 5%, and 0%. Certain goods and services fall in each of the categories. For example, accommodating expenses and businesses are entitled to a reduced rate of 7%. While power supplies, edible items, medical aids, and books/newspaper printing have a lower rate of 5%. The services with zero-rated rates include local bus services, inter-island transport, foreign passports, human consumption food, etc.
Zero-rated VAT means that the business would charge no tax to its consumers, but the business entity can claim back its incurred VAT.
Apart from that, VAT is operational in two types; Input VAT and Output VAT.
- Input tax is the one that a business owner invests in the purchasing of merchandise for business. Or maybe for creating resources to supply his services.,
- Contrarily, output tax is one that a business owner charges to his customers while supplying them with his goods or services.
Exemptions mean that the business entity does not have to register them for VAT. No tax is paid, and neither can they charge VAT to their customers. Some of the examples are:
- Water Supply by Public Authority.
- Land supply for commercial purposes.
- Insurance and Financial Services.
- Health and Welfare Services.
De-registering or Exiting VAT:
If you want to quit VAT at any point, you have to look after the fiscal year’s appropriate time. Communicate with the Customer Care Unit and make sure if you have any due tax payments. One cannot leave the registration without settling the previous accounts. After all the settlements, submit your request for de-registration.
Items that are blocked for VAT as Input:
Blocking means that no VAT claim is applicable in the purchasing of these particular items. No matter if they fall in any category of a threshold or even as zero-rated. No refund is applicable for these products taken into as an economic activity:
- Tobacco based products.
- Alcoholic beverages and Alcohol.
- Ornamental items; artistic work and paintings, crafted decoration pieces, hand-made sculptures, etc.
- Car leasing. (Lease included)
- Goods or Services rendered for the sake of entertainment.
- Scrap goods purchased for the purpose of repairing and keeping.
Also visit vat calculator South Africa.
Is input VAT an expense?
Clearly, no! Input VAT is no doubt an investment made on the part of a business entity. Still, the legislation allows a business entity to deduct that Input amount from the total Output. Also, there are reclaims policies to favor this expense.
Are restraints Vat exempted?
Restaurants in Malta pay a rate of VAT depending upon their turnover threshold. But they are not exempted since the business is one of the most paying businesses.
For Further Queries, you can also visit this CFR website.