Chapter 01 Local News
Malta Tax and Customs Administration News
Supplying Services to Taxable Persons Established in the EU and Taxable and Non-Taxable Persons Established Outside the EU – Explanatory Notes
The Malta Tax and Customs Administration ("MTCA") published Explanatory Notes addressing the VAT treatment of services supplied to customers established outside Malta. The notes cover two principal categories of supplies: first, services provided to a taxable person acting as such, that is, business-to-business ("B2B") supplies to which the general place of supply rule applies, whereby VAT is due in the jurisdiction where the business customer is established; and second, certain specified services provided to non-taxable customers established outside the European Union, which similarly are deemed to take place where the non-taxable recipient is established or resides, thereby falling outside the scope of Maltese VAT.
The notes provide practical scenario analysis addressing the invoicing obligations, recapitulative statement requirements, and VAT registration considerations arising for Maltese established suppliers in each of these situations.
VAT Treatment of Taxi Operators Using Online Ride-Hailing Platforms –
Explanatory Notes
The MTCA published Explanatory Notes setting out the VAT implications for taxi operators who make use of online ride-hailing platforms to provide their services. The notes clarify that where a platform acts in the name and for the account of the taxi operator, it remains the taxi operator who is responsible for accounting for VAT on the full consideration received from the consumer, including any commission element. The commission charged by the platform to the taxi operator for the facilitation service constitutes a separate supply subject to VAT under the general B2B place of supply rules, with the taxi operator typically being required to selfcharge 18% VAT on that commission where the platform is not registered under article 10 of the VAT Act in Malta.
The notes further address the recovery of input VAT on fuel and other vehicle costs, VAT implications arising from the private use of a taxi, and the VAT consequences of cancelling an article 10 VAT registration, including the deemed supply rules that apply where goods forming part of the economic activity remain under the ownership of the taxable person, at the point of cancellation. Practical worked examples are provided for both article 10 registered and article 11 registered (exempt SME) taxi operators to illustrate the applicable VAT treatment in each scenario.
Budget Measures Act 2026 – VAT Act Explanatory Notes
The MTCA published Explanatory Notes in connection with the Budget Measures Act 2026 (the "Act"), which introduces a series of amendments to the VAT Act [Chapter 406 of the Laws of Malta]. The notes explain that the amendments fall into three broad categories: those required to transpose Article 2 of Council Directive (EU) 2025/516 ("ViDA"), which brings changes in force as of 1ˢᵗ January 2027, amendments to existing provisions identified as requiring clarification in accordance with the EU VAT Directive, and cosmetic amendments of no material practical impact.
The principal substantive changes include the extension of the deemed supplier rule for e-commerce platforms to intra-EU supplies of goods to certain taxable persons; the phasing out of the call-off stock simplification to goods dispatched on or before 30 June 2028 in preparation for the new transfer of own goods regime under ViDA; and clarifications regarding the OSS and IOSS schemes and their interplay with other legislation.
Among the other amendments, the Act introduces a VAT transfer pricing measure for supplies between related parties at non-arm's-length prices, a new anti-abuse rule applying VAT to free of charge services where related input VAT has been reclaimed, a clarification that prices must generally be displayed inclusive of VAT, and updated rules on refunds, appeals, and electronic notification. All amendments other than those transposing ViDA come into force upon the date of publication of the Act.
Legal Notices
Legal Notice 75 of 2026 - Value Added Tax Act (Amendment of Fifth Schedule) (Amendment) Regulations, 2026
On the 27ᵗʰ of March 2026, Legal Notice 75 of 2026 was published. This Legal Notice has introduced an additional scope in the exemption for passenger transport services, with passenger transport services offered by means of a public lift (which is recognised as such by the Commissioner), to fall within the scope of the exemption.
Acts
Act No III of 2026
The Budget Measures Implementation Act was published on the 10ᵗʰ of March 2026, which contained amendments to the VAT Act as outlined in the previous page.
Chapter 02 Local Court Decisions
Administrative Review Tribunal
XXX vs Il-Kummissarju tat-Taxxa u d-Dwana – 72/2023VG – 12/01/2026
The case concerned an appeal lodged by the appellant ("the Appellant") before the Administrative Review Tribunal against assessments issued by the Commissioner for Tax and Customs ("CfTC") in respect of the VAT tax periods falling between 1ˢᵗ January 2016 and 31ˢᵗ December 2016, demanding payment of a total sum of €68,063.10, comprising €41,805.72 in tax, €8,361.14 in administrative penalties, and €17,896.24 in interest.
The Appellant appealed on several grounds, arguing principally that the CfTC had breached the principles of natural justice and his fundamental rights, that the assessments were erroneous and excessive given that he operated his business on a part-time basis, and that they ought not to be treated as final assessments since the CfTC had not followed the procedure prescribed by the VAT Act (Chapter 406 of the Laws of Malta).
The CfTC opposed the appeal on the merits and raised a preliminary plea pursuant to Article 48(5) of Chapter 406, arguing that the Appellant had failed to provide the documentation requested during the investigation and ought therefore to be prohibited from producing it before the Tribunal. The present decision dealt exclusively with this preliminary plea, which prohibits a person who fails, without reasonable excuse, to produce documentation requested by written notice within thirty days of notification from producing such documentation before a Tribunal or Court.
The Tribunal noted that on 13ᵗʰ October 2021, the Compliance and Investigations Unit had issued a notice to the Appellant requesting documentation including outstanding income tax returns, VAT returns, trade books, ledgers, and bank state requesting financial documentation, with which the Appellant did not comply. In proceedings, the Appellant sought to justify his non-compliance by reference to the death of his wife.
The Tribunal found the Appellant's account wholly lacking in credibility, his wife had in fact passed away in 2015, some six years before the notice was issued, and concluded that he had chosen to ignore the investigation and its outcome.
Notwithstanding those credibility findings, the Tribunal identified a separate and determinative issue undermining the CfTC's preliminary plea: for the prohibition in Article 48(5) of Chapter 406 to apply, the notice issued by the CfTC must itself have been compliant with that provision, affording the taxpayer thirty days from notification to produce the requested documentation. The notice dated 13ᵗʰ October 2021 had instead set a deadline of "before the end of this month, the latest," affording the Appellant only seventeen days, not the thirty days required by law.
The Tribunal accordingly concluded that the notice of 13ᵗʰ October 2021 did not constitute a valid notice under Article 48(5) of Chapter 406 and that the first proviso of that article could not therefore apply against the Appellant. The CfTC's preliminary plea was dismissed as legally inadmissible, and the Tribunal ordered the continuation of proceedings on the merits, reserving costs to the final judgment.
Civil Court, First Hall
Kummissarju tat-Taxxa u d-Dwana vs Digisec Media Limited (C 56612)1293/2024AD – 26/02/2026
The case concerned an application filed before the Civil Court, First Hall by the Commissioner for Tax and Customs ("CfTC") against Digisec Media Limited (C 56612) ("the Company") on 27ᵗʰ November 2024, seeking the registration of a foreign instrument as an executive title in terms of Council Directive 2010/24/EU of 16 March 2010 on Mutual Assistance for the Recovery of Claims Relating to Taxes, Duties and Other Measures ("the Directive"), as implemented in Malta through the Mutual Assistance for the Recovery of Claims Relating to Taxes, Duties and Other Measures Order, 2012 (Legal Notice 153 of 2012) ("the Order").
The CfTC submitted that it had received a valid request from the competent authority in the Netherlands identifying the Company as owing €110,285.61 in VAT, together with accruing interest, and confirmed that all requirements of the Directive had been satisfied. Since the Company is a Maltese company with a presence in Malta, the CfTC requested the Court to order the registration of the annexed instrument as an official copy constituting an executive title and to effect notification thereof to the Company in accordance with Chapter 12 of the Laws of Malta.
The Company was duly notified but did not contest the proceedings. Satisfied that the requirements of Council Directive 2010/24/EU and Legal Notice 153 of 2012 had been duly observed, the Court ordered the registration of the instrument marked as Document B as an official copy constituting an executive title for the sum of €110,285.61, with costs to be borne by the Company.
Other Judgements:
233/2024 - Kummissarju tat-Taxxi u d-Dwana vs Marshall Limited (C10331) –decided 26 February 2026 th
250/2021 - Shapoorji Pallonji (Malta) Limited v Il-Kummissarju tat-Taxxi –decided 6ᵗʰ February 2026
Court of Magistrates (Criminal Judicature)
Il-Pulizija
(Spettur C. Curmi vs Alexander Fenech - 1972/2025 – 13/01/2026
The case concerned criminal proceedings before the Court of Magistrates (Malta) in its Criminal Judicature jurisdiction against Alexander Fenech ("the Accused"), in his capacity as director of E.C. Municipals Limited (C-62598), for failure to issue a fiscal receipt in respect of services rendered to Aġenzija Ambjent Malta on 7ᵗʰ December 2021, 17ᵗʰ January 2022, and 18ᵗʰ June 2022, in breach of items 1, 2, 3, and 10 of the Thirteenth Schedule and Articles 13(8), 51, 77(a), 77(e), 78, 81, and 82 of the VAT Act (Chapter 406 of the Laws of Malta). The case was heard afresh following an earlier acquittal that was set aside on appeal by the Attorney General.
The evidence established that the Accused had personally admitted that no fiscal receipts had been issued, that E.C. Municipals Limited had never applied for fiscal receipt books, that the invoices issued were invalid for failing to include Aġenzija Ambjent Malta's VAT number, and that the Accused served as director and company secretary throughout the relevant period.
The defence contended that the examination should be limited to the charge as formulated, namely, failure to issue a fiscal receipt under the Thirteenth Schedule, which governs business-to-consumer transactions. Since Aġenzija Ambjent Malta held a VAT number, the defence argued the transactions were business-to-business in nature, regulated by the Twelfth Schedule, and that no obligation to issue a fiscal receipt therefore arose. The defence further contended that the charge was defective for explicitly referring to the Thirteenth Schedule when the Twelfth Schedule ought to have applied.
The central issue was whether the transactions were business-to-consumer in nature, attracting the obligation to issue a fiscal receipt under the Thirteenth Schedule, or business-to-business transactions subject to the Twelfth Schedule. The Court found that, although Aġenzija Ambjent Malta holds a VAT number, it is registered as a public authority and was not registered to receive the type of services rendered. The transactions were accordingly found to be business-toconsumer in nature. Given the Accused's personal admission that no fiscal receipts had been issued, his failure to apply for fiscal receipt books, and his role as director and company secretary throughout the relevant period, the Court found him to bear full personal responsibility for what it characterised as an unequivocal failure to comply with the fiscal obligations imposed by law.
j g , g g converted to imprisonment.
Chapter 03 EU News
No VAT related European news has been published throughout this past calendar quarter
VAT Committee Meetings
No VAT Committee Meetings were held throughout the past calendar quarter.
VAT Expert Group Meetings
No VAT Expert Group Meetings were held throughout the past calendar quarter.
Group on the Future of VAT Meetings
No Group on the Future of VAT Meetings were held throughout the past calendar quarter.
Chapter 04 CJEU Decision -
Latest Selection Update
T-638/24 – Finanzamt Österreich v D GmbH
D GmbH ("D"), an Austrian limited liability company, acquired goods from suppliers established in Austria and arranged for those goods to be transported from Austria to other Member States. In the context of those acquisitions, D communicated its Austrian VAT identification number to its suppliers. The suppliers issued invoices to D including Austrian VAT. For the purposes of its VAT returns, D treated that VAT as deductible input tax and took the position that the acquisitions were not intraCommunity acquisitions taxable in Austria.
Following a tax audit covering the years 2011 to 2015, the Austrian tax authority raised VAT assessments against D. It concluded that the transactions constituted intraCommunity acquisitions of goods, that D had used its Austrian VAT identification number for those transactions, and that D had not demonstrated that VAT had been applied in the Member State of arrival. Accordingly, the acquisitions were deemed taxable in Austria pursuant to the national provision implementing Article 41 of the VAT Directive. The tax authority further found that the corresponding intraCommunity supplies were exempt from VAT, meaning Austrian VAT had been incorrectly included on the suppliers' invoices. Under the national provision implementing Article 203 of the VAT Directive, the suppliers were therefore liable for the VAT wrongly invoiced, and D was denied the right to deduct that VAT as input tax.
The case ultimately came before the (Supreme Administrative Court, Austria, which had doubts as to whether the simultaneous application of Articles 41 and 203 of the VAT Directive was compatible with the principles of fiscal neutrality and proportionality. In particular, the referring court questioned whether the approach could be squared with the Court of Justice's earlier judgment in Dyrektor Izby Skarbowej w W. (C-696/20), which had found that applying Article 41 in a Member State where the corresponding supply had been treated definitively as non-exempt was contrary to those principles. The court referred two questions to the General Court for a preliminary ruling.
In its deliberations, the General Court drew a clear distinction between the present case and Dyrektor Izby Skarbowej w W. In that earlier case, the intra-Community supply had been treated definitively as a non-exempt, taxable transaction, meaning the supplier had been subject to VAT on the supply itself and the acquirer had been unable to deduct input tax. By contrast, in the present case, the suppliers' liability arose not because their supplies were treated as taxable but solely because Austrian VAT had been incorrectly stated on the invoices, triggering liability under Article 203 of the VAT Directive, a provision that operates independently of any underlying taxable transaction and is designed to eliminate the risk of loss of tax revenue. Critically, that liability was not definitive: Austrian law permitted suppliers to adjust incorrect invoices at any time, even after the relevant limitation period had expired, thereby allowing the Article 203 liability to be corrected.
The General Court held that Articles 40, 41 and 203 of the VAT Directive, together with the principles of fiscal neutrality and proportionality, do not preclude national legislation which applies VAT to an intra-Community acquisition in the Member State of identification (which in this case also happened to be the Member State of departure) where the corresponding intra-Community supply is exempt from VAT but gives rise to a tax liability in that same Member State under Article 203 by reason of VAT having been incorrectly invoiced. Given its answer to the first question, the Court found it unnecessary to address the second question concerning the timing of any intra-Community acquisition arising from a subsequent invoice correction.
While every effort was made to ensure that the content of this newsletter is accurate and reflects the current position at law and in practice, we do not accept any responsibility for any damage which may result from a change in the law or from a different interpretation or application of the local law by the authorities or the local courts. The information contained in the newsletter is intended to serve solely as guidance and any content of a legal nature therein does not constitute or should be interpreted as constituting legal advice. Consulting your tax practitioner is recommended in case you wish to take any decision connected to content of this newsletter.
Should you require further information on the above please contact Brandon Gatt on brandon@zampapartners.com