What is VAT (Malta)?
Maltese VAT has an 18% standard rate, reduced rates of 12%, 7% and 5%, and a 0% rate described as exempt with credit, which covers food for human consumption and pharmaceuticals.
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Current Rate (Quarterly VAT periods)
18% standard. 12%, 7% and 5% reduced. 0% on food, pharmaceuticals, exports and intra-EU supplies
Example
A Maltese consultancy charges €1,000 net for services. At 18%, VAT is €180. The quarter ending 31 March is filed and paid by 15 May.
How VAT (Malta) works in Malta
The 12% rate covers items such as short-term pleasure-boat hire and custody of securities. The 7% rate covers licensed tourist accommodation and sporting facilities. The 5% rate covers items such as electricity, printed matter including e-books, and admission to museums, concerts and theatres.
There are three registration types, Article 10, Article 11 and Article 12. Returns are quarterly, due with payment by the 15th day of the second month after the period.
The VAT number is MT followed by 8 digits and is separate from the income tax number.
Related terms
Article 11 is the VAT registration for small enterprises, with a unified domestic threshold of €35,000 annual turnover from 1 January 2025. There is no input VAT recovery and VAT periods follow the calendar year.
Maltese corporate income tax is 35% on the worldwide income and capital gains of Maltese companies. Under the full imputation system, shareholders can reclaim part of it on distribution, so the effective rate is often far lower.
The Final Settlement System is how Maltese employers report and pay payroll tax and social security. Employers hold a PE number and file FS5 monthly, then FS7 and FS3 by 15 February.
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