Chapter 01 Local News
Malta Tax and Customs Administration News
Gaming VAT Exemption Overhaul
On the 6 and 7 of April 2026, the “CfTC” published three sets of Guidelines with a view of reshaping the VAT treatment of the gaming industry, with effect from 1 October 2026. The Guidelines were:
1. Guidelines on Item 9 of Part Two of the Fifth Schedule to the Value Added Tax Act
The Guidelines clarify which forms of gambling have been approved by the Minister for the purposes of the VAT exemption without credit, as provided for in Item 9 of Part Two of the Fifth Schedule to the VAT Act (Chapter 406, Laws of Malta). The approved forms of gambling are:
(i) Low risk games as defined in the Fifth Schedule to the Gaming Authorisations Regulations (Subsidiary Legislation 583.05);
(ii) Junket events required to be approved in accordance with the Gaming Authorisations Regulations (SL 583.05), held on an occasional basis, that is to say, events which are not organised on a routine basis and which, due to their scale and nature, require specific planning and organisational arrangements; and
(iii) The provision of any facilities for gambling on the outcome of a real-life event, which facilities can only be physically accessed at the place where the event physically takes place, including the services of bookmakers, betting exchanges and any equivalent facilities. For this purpose, "event" means a sporting event or competition.
2. Guidelines on the VAT treatment of Electronically Supplied Services
The CfTC has also updated its existing Guidelines on Electronically Supplied Services (originally issued on 4 February 2015, last updated on 7 April 2026) to provide guidance on the interpretation of the definition of "electronically supplied services" ("ESS") under paragraph (c) of sub-item 10(1) of Part Two of the Third Schedule to the VAT Act. th th
Drawing on Article 7 of Council Implementing Regulation (EU) No 282/2011, the Guidelines confirm that a service qualifies as an ESS where the following three cumulative conditions are met: (i) the service is delivered over the Internet or an electronic network; (ii) the nature of the service renders its supply essentially automated and involving minimal human intervention; and (iii) the nature of the service renders its supply impossible to ensure in the absence of information technology.
Of particular relevance to the gambling sector, the Guidelines provide nonexhaustive lists of services that do, and do not, qualify as ESS. Among those that qualify are: the offering of a facility for the placing of bets on the Internet or via an electronic network in connection with any event (whether live or otherwise) where the placing and processing of bets is essentially automated; and online access to gambling platforms enabling players to play random number generator games, whether against the house or against other players who are geographically remote, where the entire process is automated and the service provider's staff cannot impact the transaction. Online bingo (whether RNG-generated or streamed conventional bingo with electronic player selection) also qualifies.
By contrast, the offering of a facility for internet gambling pursuant to the streaming of a live casino event does not qualify as an ESS.
3. Guidelines on the place of supply of streamed and virtual activities.
The CfTC has also issued Guidelines on the place of supply of services and ancillary services relating to cultural, artistic, sporting, scientific, educational, entertainment or similar activities (such as fairs and exhibitions), including services of the organisers of such activities, when supplied to a non-taxable person, particularly where such services relate to activities which are streamed or otherwise made virtually available.
The Guidelines clarify that where such activities are streamed or made virtually available, the services fall under the proviso to item 6(2)(a) of Part 2 of the Third Schedule to the VAT Act, meaning the place of supply is where the non-taxable person is established, has a permanent address, or usually resides. Alternatively, where such services are seen to qualify as electronically supplied services, they would fall under item 10(1)(c) of Part 2 of the Third Schedule. Where activities are organised with a view to in-person participation, they follow the general rule under item 6(2)(a) (i.e. the place where the activities actually take place), even if on occasion they may be streamed or made virtually available. In cases where the supplier offers a choice between in-person and virtual participation and does not know at the time of invoicing which option the customer has chosen, the general rule takes precedence unless facts demonstrate that attendance was virtual, in which case the invoice must be corrected.
Regarding reduced rates, the streaming of events or activities held physically in Malta qualifies for any applicable reduced rate under the Eighth Schedule to the VAT Act only if live streamed, meaning the activity is performed in real time and streamed at the time of performance. Pre-recorded content that is played back does not qualify as live streaming. Where content is bundled (part live streamed, part pre-recorded), a reduced rate may only apply if live streaming is the predominant element of the supply.
Of particular relevance to the gaming sector, the Guidelines confirm that live casino services qualify as an activity similar to an entertainment activity for the purposes of item 6(2)(a), where such services concern casino-type games conducted in real time by a physical dealer or presenter operating a gaming device (as defined in the Gaming Definitions Regulations, SL 583.04), located in a studio or casino environment, and where: (a) the game is captured and transmitted via live audiovisual streaming over the internet; (b) players participate remotely through an electronic interface; (c) player actions are processed and transmitted to the dealer or presenter; and (d) the outcome of the game is determined by the execution of the game and communicated to players in real time.
Exemption on Passenger Transport Services by Means of a Public Lift Guidelines
On 2 April 2026, the CfTC published Guidelines on the application of Item 11(e) of Part One of the Fifth Schedule to the VAT Act, which provides for an exemption with credit on scheduled passenger transport services by means of a public lift recognised as such by the Commissioner. nd
The Guidelines note that what constitutes a "public lift" for these purposes is specified in item 7(4) of Part Five of the Fifth Schedule to the VAT Act, which provides that the term shall have the same meaning assigned to it in the Passenger Transport Services Regulations (Subsidiary Legislation 499.56) and that the public lift must be operated in accordance with regulation 68S of those Regulations.
For the purposes of the exemption, the Commissioner has recognised the 'Barrakka Lift' as a public lift, being the lift providing a direct connection between Lascaris Wharf, situated on the waterfront Grand Harbour side of Valletta, and the city of Valletta through the Upper Barrakka Gardens situated next to Castile Place. At present, this is the only public lift recognised under the Guidelines.
The MTCA published guidance on the process for changing a VAT registration type via its online portal.
Legal Notices
Legal Notice 86 of 2026
Legal Notice 86 of 2026, published on the 1 of April 2026, substitutes in totality Item 2 of Part Two of the Fifth Schedule of the Malta VAT to include “Betting, lotteries and other forms of gambling as may be approved by the Minister”. This legal notice will come into effect as from 1 October 2026 and marks the overhaul which has been carried out to the VAT treatment of the gaming industry.
Acts
No Acts with regards to Value Added Tax legislation were published during this calendar quarter.
Chapter 02
Local Court Decisions
Administrative Review Tribunal
There were no cases decided by the Administrative Review Tribunal in relation to VAT
Civil Court, First Hall
Il-Kummissarju tat-Taxxa u d-Dwana vs DZ Company Limited (C 7882) –1269/2026 – 05/05/2026
The judgment, delivered on 5 May 2026, arose from opposition proceedings filed by DZ Company Limited ("the Company") against an enforcement letter issued by the Commissioner for Tax and Customs ("CfTC") claiming €64,451.46. The Company contested the enforcement on two grounds: that it had never been formally notified of the payment demand notice required under Article 59 of the VAT Act (Chapter 406), and that the amount claimed was not due.
The CfTC raised a preliminary plea that the opposition was null because it had been filed by simple application (rikors sempliċi) rather than by sworn application (rikors maħluf). The Court upheld the plea, drawing an important distinction: challenges to the fiscal merits (assessment, quantum, penalties) must be brought before the Administrative Review Tribunal, whereas challenges to the procedural validity of the executive title under Article 59 fall within the jurisdiction of the Civil Court, First Hall, and must be initiated by sworn application.
Having found that the Company used the wrong procedural form, the Court declared the application irregular and null pursuant to Article 164(1) of the Code of Organisation and Civil Procedure (Chapter 12), with costs against the Company. The merits of the opposition were not adjudicated.
Other Judgments:
524/2025AD - Kummissarju tat-Taxxa u d-Dwana vs Nextlove Limited (C60580)21 April 2026 st
Court of Appeal
(Inferior and Superior
Jurisdiction)
Mark Anthony Tabone vs Il-Kummissarju tat-Taxxa u Dwana –210/2012 LM – 29/04/2026
The judgment, delivered by the Court of Appeal (Inferior Jurisdiction) on 29 April 2026, concerned an appeal against the decision of the Administrative Review Tribunal of 7 October 2025, which had dismissed the appellant's challenge to VAT assessments covering the tax periods 1 December 2005 to 30 June 2011. th th st th
The assessments arose from an investigation which revealed that the appellant had under-declared output VAT, through suppressed sales identified via audit trail exercises, unreconciled manual fiscal receipts, and undeclared income from gypsum works, and had over-claimed input VAT in respect of expenses not supported by proper tax invoices. The appellant raised four grounds of appeal: (i) that he was never formally informed of the investigation; (ii) that he was denied the right to make corrections under the VAT Act; (iii) that he was not given access to the documentation submitted to the CfTC; and (iv) that the assessments were issued in breach of Article 41 of the EU Charter of Fundamental Rights, having been penalised seven years after the relevant fiscal periods.
The Court dismissed all four grounds and confirmed the Tribunal's decision in its entirety. In particular, the Court held that the burden of proof in fiscal matters rests on the taxpayer, and the appellant had failed to adduce satisfactory evidence to challenge the assessments. The Court further confirmed that the statutory six-year time limit under the VAT Act relates to notification of the provisional assessment, not the final assessment, and that this time limit had been complied with.
Court of Magistrates (Criminal Judicature)
Il-Pulizija vs Kurt Micallef – 27th May 2026 – 10511/2025
This case concerned criminal proceedings before the Court of Magistrates arising from a VAT inspection carried out on 31 May 2025 at a hair salon in Naxxar.
Revenue Inspectors from the MTCA identified a discrepancy of €65 between the EPOS card payment reading (€651) and the cash register X reading (€586), indicating that fiscal receipts had not been issued for the full value of transactions processed. st
The accused, the salon owner, explained that €50 of the discrepancy represented a client deposit, which, on the advice of his accountant, he had not punched through the cash register at the time of receipt, and €15 represented tips. The Court found the charge under Articles 13(8), 77 and 78 of the VAT Act (Chapter 406) proven and imposed a fine of €700.
Other Judgments:
3019/2026 - Il-Pulizija vs Christopher Azzopard Keith Bezzina - 4 May 2026 th
3211/2024 - Il-Pulizija vs Ryan Montesin – 27 May 2026 th
2194/2026 - Il-Pulizija vs Antonio Grima – 22 June 2026 nd
2193/2026 - Il-Pulizija vs Paul Grech – 22 June 2026 nd
Chapter 03 EU News
VAT in the Digital Age - 2026 Work Programme
The European Commission published the 2026 Work Programme for the implementation of the VAT in the Digital Age ("ViDA") package. The work programme sets out the key implementation milestones for the three pillars of ViDA: digital reporting requirements and e-invoicing, the updated rules for the platform economy, and the single VAT registration.
VAT Committee Meetings
The agenda for the 43 Meeting was published where the presentation of the final report for the study on the taxation of the financial sector was presented together with the presentation of the final report on the Study on the Challenges of VAT Beyond ViDA.
VAT Expert Group Meetings
VEG No 136 – 42nd Meeting – 13 March 2026 – Issued 20/04/2026
The 42nd meeting of the VAT Expert Group ("VEG") was held on 13 March 2026. The meeting discussed first draft Explanatory Notes on the Platform economy, first draft Explanatory Notes and One Stop Shop (”OSS”) guidelines on Single VAT Registration (“SVR”) for changes from 1 January 2027, and the second draft Explanatory Notes on Digital Reporting Requirements (“DRR”).
Key discussion points included the need for more practical examples on chain transactions, the distinction between the deemed supplier regime and TOMS, validation of VAT identification numbers by platforms, the interaction between einvoicing and DRR, criteria for sanctions and penalties during the initial period of application, and interoperability for cross-border e-invoice transmission.
Group on the Future of VAT Meetings
GFV No 157 – 51st Meeting – 3 March 2026 – Issued 13/04/2026 rd
The 51st meeting of the Group on the Future of VAT ("GFV") was held on 3 March 2026. The discussions concerned the implementation of the ViDA package, covering first draft Explanatory Notes on the Platform economy, first draft Explanatory Notes and OSS guidelines on SVR for changes from 1 January 2027, and the second draft Explanatory Notes on DRR.
Key discussion points included the scope of the platform economy measure (particularly farmers under the flat-rate scheme), transitional period treatment, the nature of the SME exemption scheme and the IOSS, the concept of ‘tax representative’, treatment of attachments within structured e-invoice data, correction of invoices, and the reporting of VAT rates and amounts.
The next meetings include an online joint GFV/VEG meeting on 25 June 2026 which aimed to discuss new versions of the Explanatory Notes and a final joint meeting planned for 19 November 2026 to finalise the Explanatory Notes for publication in 2027.
Chapter 04 CJEU DecisionLatest Selection Update
C-603/24 – Stellantis Portugal, S.A. v Autoridade Tributária e Aduaneira
– 13 May 2026 th
On 13 May 2026, the Court of Justice (Ninth Chamber) delivered its judgment in Case C-603/24, following a reference for a preliminary ruling from the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal) and an Opinion of Advocate General Kokott delivered on 15 January 2026.
Stellantis Portugal, S.A. ("Stellantis"), as the legal successor of Opel Portugal, Lda (formerly General Motors Portugal or "GMP"), was involved in proceedings against the Portuguese Tax and Customs Authority concerning the VAT treatment of intragroup transfer pricing adjustments, with €1,504,215.49 (including compensatory interest) at stake.
GMP formed part of the General Motors group and operated as a national sales company in Portugal. It purchased motor vehicles from original equipment manufacturers (“OEMs”) established in the European Union and sold those vehicles to independent dealers in Portugal. Where those vehicles were affected by defects resulting from the production process, anomalies covered by the manufacturer’s warranties, or required roadside assistance, the independent dealers repaired the vehicles and invoiced GMP for the costs. GMP then informed the OEMs of the costs borne by it for the distribution of the vehicles, including the repair costs as well as its own operating costs (staff, electricity, marketing).
Under a 2004 intra-group agreement, the transfer prices of vehicles sold by the OEMs to GMP were subject to periodic adjustment to guarantee GMP a previously determined profit margin. These adjustments were evidenced by credit or debit notes issued by the OEMs to GMP.
The Portuguese Tax Authority considered that, by bearing and passing on the repair costs through the transfer pricing adjustments, GMP had provided repair services to the OEMs, which were subject to VAT.
The case ultimately reached the Supreme Administrative Court, Portugal, which referred a preliminary ruling question to the Court of Justice asking whether such a transfer pricing adjustment constitutes consideration for a “supply of services effected for consideration” within the meaning of Article 2 of the Sixth VAT Directive.
The Court of Justice held that such an adjustment does not constitute consideration for a supply of services effected for consideration unless there is, between the companies, a legal relationship characterised by reciprocal commitments relating to the supply by the acquiring company of services to the selling company and the payment by the selling company of remuneration in respect of those services in the form of such an adjustment, establishing a direct link between the supply of those services and that adjustment.
The Court noted that the sole legal relationship between GMP and the OEMs was the 2004 agreement, which concerned the fixing of transfer prices to guarantee a profit margin. None of its clauses established an obligation on GMP to repair vehicles in return for remuneration. Furthermore, the adjustments were calculated taking into account not only repair costs but also GMP’s operating costs, and were designed solely to guarantee a predetermined margin, not to reimburse specific costs. Consequently, any link between repair services and the transfer pricing adjustments was, at most, only indirect.
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, and should not 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.