Malta VAT Rates and Registration Guide 2026

2. What Is the Difference Between Zero-Rated and Exempt?

Malta law does not use the term "zero rate". It uses exempt with credit and exempt without credit. The difference matters because it decides whether you can claim back the VAT you pay on your own costs.

• Exempt with credit (effectively 0%): you charge no VAT to your customer, but you can still recover input VAT. Exports, intra-EU supplies of goods and food for human consumption fall here. Since 2025 this also covers certain sanitary products for women and certain medical accessories for cancer treatment.
• Exempt without credit: you charge no VAT and you cannot recover input VAT. Banks, insurers, schools, most clinics, long-term landlords and Article 11 small undertakings are in this position. The VAT on their costs becomes a real cost.

3. Which VAT Registration Do You Need?

Every taxable person carrying on an economic activity in Malta must register for VAT. The article of the VAT Act you register under decides what you charge and what you file. Applications are made online through the MTCA portal, and certificates are issued electronically.

Sources: PwC Malta - VAT updates 2025, BDO Malta and CSB Group

Article 10: full VAT registration

An Article 10 registered person gets a VAT number with the MT prefix, adds VAT to invoices, recovers VAT paid on business purchases and files VAT returns. Article 10 registrants that supply goods to VAT-registered customers in other EU countries also file recapitulative statements.

Article 11: small undertaking exemption

Article 11 is the simplified option for small businesses, freelancers and side activities. You do not add VAT to your invoices, so your prices are lower for private customers, but you cannot recover the VAT on your costs. If you are self-employed in Malta and most of your clients are consumers, Article 11 is usually the simpler choice.

Article 12: intra-EU acquisitions and services

If you are not registered under Article 10 but buy more than €10,000 of goods a year from other EU countries, or receive services from abroad where VAT must be paid in Malta under the reverse charge, you also need an Article 12 registration. You then account for Malta VAT on those purchases yourself.

4. What Is the VAT Registration Threshold in Malta?

Since 1 January 2025, Malta uses a single domestic threshold of €35,000 (excluding VAT) for the Article 11 exemption. It replaced the older system of separate thresholds for goods and services. Eligibility is based on your Malta turnover in the preceding calendar year.

• At or below €35,000: you can register under Article 11 and not charge VAT.
• Above €35,000: you must register under Article 10. An Article 11 registration ends on the first day of the month after you no longer qualify.
• For companies, the turnover of related entities that own or control more than 10% of the business is added when testing the threshold.
• If you move from Article 10 to Article 11, the lock-in period is now 12 months (previously 24 months).

The EU cross-border SME scheme

Under the EU SME scheme, also from 2025, a small business can use VAT exemption in other Member States too. Total turnover across the EU must not exceed the Union threshold of €100,000, and turnover in each country must stay under that country's own threshold. In Malta this is handled through Articles 11A and 11B (MTCA explanatory notes).

5. When Is the VAT Return Due?

For VAT return filing in Malta, Article 10 periods are normally calendar quarters. The return and the payment are both due by the 15th day of the second month after the end of the quarter. The Commissioner can assign a different period, such as monthly or yearly.

Recapitulative statements for intra-EU supplies are due by the 15th of the month after the period they cover. Article 12 notices for goods acquired from the EU are due 15 days after the end of the month of acquisition. Employers have separate monthly payroll deadlines on top of these; see our FS5 guide.

6. How Is VAT Calculated? Worked Examples

Example 1: Article 10 consultant, one quarter

Example 2: Article 11 freelancer

Example 3: Hotel room at the 7% rate

Removing VAT from a VAT-inclusive price

To find the VAT inside a price that already includes 18% VAT, divide by 1.18. A €118 receipt contains €100 net and €18 VAT. For the reduced rates divide by 1.12, 1.07 or 1.05. Imported cars are a common case where VAT stacks on duty and registration tax; our vehicle import guide and import vehicle calculator show the full chain.

7. What Happens If You File Late?

• Late VAT return: an administrative penalty, generally the higher of 1% of the VAT due or €20 for each month or part of a month the return is late.
• Late payment: interest on unpaid VAT at 0.6% per month.
• Late recapitulative statement: €50 per month, with a cap.

The MTCA can also raise an assessment if a return is not submitted. Filing a nil return on time avoids penalties in a quarter with no sales.

8. Is the Eco-Contribution a VAT Charge?

No. The Malta eco-contribution (officially the environmental contribution) is a separate levy on tourist accommodation. It is not VAT, so it does not appear as VAT on the invoice and is not recoverable as input VAT.

• €1.50 per person per night from 1 July 2026 (previously €0.50)
• Only guests aged 18 or over at the start of the stay
• Capped at €22.50 per person per stay

Source: Malta Tourism Authority - Environmental Contribution

Frequently Asked Questions