Malta’s Commissioner for Tax and Customs issued guidance on VAT transition rules after certain online gaming services became taxable from 1 October 2026. The guidance clarified output VAT, input VAT recovery and capital goods adjustments.
Malta’s Commissioner for Tax and Customs issued the Guidelines on Transitory Measures for Input and Output VAT Pursuant to a Change in the VAT Act in the VAT Treatment of a Supply on 30 September 2026. The guidance followed changes to the VAT Act that made certain supplies relating to online gaming services subject to VAT from 1 October 2026.
The Guidelines said VAT treatment depends on when the services were actually performed. Services performed before 1 October remained exempt, while services performed from that date became taxable. Continuous supplies crossing the transition date must be apportioned pro rata across the relevant period.
Input VAT linked exclusively to taxable supplies is 100% recoverable, while input VAT relating only to exempt supplies remains non-recoverable. Mixed costs must be apportioned under the partial attribution methodology in Item 6 or 8 of the Tenth Schedule to the VAT Act.
The Guidelines also covered multi-year expenses, continuous services without invoices, and endorsement and marketing contracts. Where services continued without an invoice through year-end, the chargeable event occurred on 31 December, with an adjustment made in Q1 of the following year.
For capital goods, taxpayers may claim annual input VAT adjustments under the Capital Goods Scheme in Subsidiary Legislation 406.12. Adjustments apply over 5 years (1/5 per year) for general capital assets and 20 years (1/20 per year) for immovable property.
