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Who is liable to register for VAT?
If you are a person performing
an economic activity, whatever the result or scope of that activity, then you
are considered as a taxable person. Under normal circumstances, you are required
to register for VAT under article 10. If your annual turnover does not exceed
the established threshold (see below) then you may opt to register under article
11 as an exempt person.
What is an economic activity?
An economic activity means an
activity carried on by a person, who is not an employee (see article 5(5) for
the definition of employee), and consisting of any one or more of the following:
- any trade, business, profession or vocation and the provision of any
personal services;
- the exploitation of tangible or intangible property for the purpose of
obtaining income there from on a continuing basis;
- the provision by a club, association or organisation of the facilities or
advantages available to its members for a subscription or other consideration;
- the admission of persons to any premises for a consideration.
The activities of a public authority assuming functions assigned to it by
law shall not be deemed to be an economic activity except as and to the extent
provided in the First Schedule of the VAT Act and except where such treatment as
non-taxable persons would lead to significant distortions in
competition.
Under what registration type should you register?
There are three types of
Registrations for VAT as follows: (a) If you are supplying goods or services and
your annual turnover exceeds the established exempt threshold below, you have to
register for VAT under article 10, by which you would be liable to charge VAT on
your taxable supplies and you could claim back the VAT you incur in the course
of your taxable activity under certain conditions.
A person registered under article 10 would
- have a VAT number with the prefix MT
- have to issue fiscal receipts or tax invoices, as the case may be, on all
supplies made by him
- normally submit a VAT return for a tax period of three months by the not
later than 6 weeks after the end of the tax period, or as directed by the
Commissioner.
(b) If you are supplying goods or services and your annual turnover does
not exceed the established entry threshold (see below), you may register for VAT
as exempt under article 11. You will not charge VAT on your supplies and will
not be able to claim back the VAT you incur in the course of your economic
activity. However, you may instead opt to register for VAT under article 10 to
charge VAT and claim a deduction of the VAT incurred in the normal way. If you
decide to opt for the latter option, then you are required to remain under
article 10 for a minimum of thirty-six months. It is only after that period that
you would be able to register under article 11 and provided that the exit
threshold is not exceeded.
A person registered under article 11 would
- have an identification number without the MT prefix
- have to issue fiscal receipts or tax invoices, as the case may be, on all
supplies made by him
- submit a declaration (simplified tax return) at the end of each calendar
year which must be submitted by the 15th March of the following year.
(c) If you are a non-taxable legal person or a taxable person not
registered under article 10, and you make intra-community acquisitions of goods
in Malta the value of which exceed €10,000 since the start of the year, then you
are liable to register for VAT under article 12 and pay VAT in Malta each time
you make such intra-community acquisitions.
If you are registered under article 11 as an exempt taxable person and
you intend to make Intra-Community Acquisitions and pay VAT thereon in Malta,
then you need to register also under Article 12 to obtain a valid identification
number for this purpose and qualify for such an arrangement.
What are the entry and exit thresholds?
The entry threshold is the
amount of turnover per annum under which a person could opt to register as an
exempt person under article 11 (see above). This threshold depends on whether
you are supplying goods, services with high value added, or services with low
value added. The exit threshold is applied in the case where a person who is
registered under article 10 would change his registration to article 11
(exempt).
Services with low value added are those services where the value of the
service includes goods which are incorporated in the value of that service, e.g.
an electrician or catering services. Other services are services usually with
high value added where the value of the service has a very high content of value
added, i.e. the value of the goods incorporated with the supply are minimal,
e.g. services of an accountant or a lawyer.
The different thresholds are as follows:
| Economic Activity |
Entry Threshold |
Exit Threshold |
| Economic activity consisting mainly of supplies of goods |
€35,000 |
€28,000 |
| Economic activity consisting mainly of supplies of services with low
value added |
€24,000 |
€19,000 |
| Other economic activities |
€20,000 |
€17,000 |
Where a person registered under article 11 provides both goods and
services, the applicable threshold shall be determined in accordance with the
principal nature of the supply, taking account of the total value of all the
supplies.
The turnover of a business is the total value of sales, excluding:
- Exempt without credit supplies
- The transfer of a business as a going concern
- The sale of fixed assets
- Supplies made to the business and deemed to be made by that business under
the reverse charge provisions
The thresholds for each economic activity pertaining to the same category
are assigned by the Department and apply across the board for that category.
What documents do I need to register for VAT?
A Copy of the I.D
Card/Passport of the applicant or in the case of a Limited Liability Company, of
the authorised representative vested with the legal representation must be
presented at the time of registration. In the case of a limited liability
company or a registered partnership, a copy of the Memorandum and Articles of
Association should be produced.
How long does the process for VAT Declaration / Return take to
complete online?
The electronic process for VAT
Declaration / Return takes approximately 15 minutes to complete.
How long does it take for the VAT Department to complete your
VAT Declaration / Return submission?
The process of vetting and
processing of the submission takes a maximum period of 90 working days. IF A
REFUND DUE TO YOU IS NOT PAID TO YOU IN TIME THEN YOU WILL BE PAID INTEREST OF
0.54% PER MONTH.
How long does the process for the VAT Refund (8th Directive)
take to complete online?
The electronic process for VAT
Refund (8th Directive) takes approximately 20 minutes to complete.
How long does it take for the VAT Department to complete your
VAT Refund (8th Directive) submission?
The process of vetting and
processing of the submission takes a maximum period of 4 months. IF A REFUND DUE
TO YOU IS NOT PAID TO YOU IN TIME THEN YOU WILL BE PAID INTEREST OF 0.54% PER
MONTH.
When is a registered person obliged to inform the VAT Department
of his change of status from an exempt to a non-exempt classification?
If you are operating below the
threshold and you have opted to be classified as an exempt person, you are duty
bound to inform the Department that you no longer qualify to be classified as
exempt as soon as it becomes evident that you will exceed the applicable
threshold.
This can be arrived at by calculating the annual turnover for the
previous twelve months at the end of each calendar quarter. When it results that
the applicable threshold is exceeded, you should inform the Department within
thirty days of occurrence, and VAT has to be collected immediately after the
lapse of this period.
I am adding another activity with the one I already had. Do I
have to apply for registration again?
If the new business activity
is in addition to other business activities that you carried out under a VAT
number, the same number should be used for the new activity. However you must
inform the Department in writing about the nature of the new business activity.
If the new business activity were carried out under a new limited
liability company set up to carry out such activity, a new registration number
would be required.
I have opened a new branch of my business in a different
locality. Can I use the same VAT number or do I have to apply for registration
again?
No, you will not have to
register again. You will use the same VAT number but you need to advise the
Department about this event, giving all pertinent details such as the Name and
address of the new branch, the increase of the number of employees and the
estimated increase of the turnover of your business.
I intend to retire from doing business. Can I pass on the
business to my son or sell the business to somebody else together with the VAT
registration number?
If you are a sole trader then
you are required to de-register your business while a new application for VAT
registration shall be drawn up by your son or any person who takes over your
business, unless that person is already registered for VAT.
However, if the business is a limited liability Company, then the
transfer has to be carried out through the Malta Financial Services Authority
(MFSA), and the VAT Department must be advised as to the change in the Directors
and Shareholders of the Company, by means of a certified copy of the memorandums
supplied by the same MFSA.
What shall I do if I need to de-register from VAT?
In order to de-register from
VAT you are required to call at the Customer Care Unit of the Department to
complete the appropriate form. An application for de-registration cannot be
processed unless you have all VAT returns and payments up to date, and any
pending matters settled with the Department.
It is pertinent to point out that if you are registered as non-exempt
(under article 10) you shall be deemed to have supplied to yourself all
remaining business assets belonging to your business, immediately before the
cancellation of your registration. In this regard you must therefore account for
the VAT due thereon in your last VAT return.
I have applied for de-registration but to date I am still
receiving VAT forms and monthly balance statements. What should I do?
For de-registration to be
effected you must first settle all pending issues with the Department. If you
continue to receive VAT forms and monthly balance statements after having
applied for de-registration, you should call at the Customer Care Section of the
Department during office hours to enquire about your situation. Department
officials will guide you accordingly.
Once all pending issues have been settled, including the payment of any
outstanding amounts due to the Department, action for de-registration will be
finalised.
I was de-registered from VAT but now I intend to re-start the
same activity. What should I do?
In order to re-activate your
old VAT registration number you should inform the Department in writing stating
your request. The VAT registration number and your Identity Card Number should
be included with your letter.
What is input and output tax?
Input tax is the VAT that is
paid by the business operator for goods and services he receives in the course
of his economic activity. Output tax is the VAT that is charged by the business
operator when he himself supplies goods or services to his
customers.
What is taxable and what is exempt?
In Malta, goods and services
are generally taxable at a standard VAT rate of 18%.
However, certain goods and services have a reduced rate of 7% or 5% or
0%.
Supplies that are taxable at 7% are:
- Accommodation in a hotel or guest house
- Accommodation in any premises, where for the purpose of that
accommodation, it is required that the premises be licensed in terms of the
Malta Travel & Tourism Act.
Supplies that are taxable at 5% are:
- Supply of electricity
- Confectionery and other edible items
- Medical Accessories
- Printed Matters
- Certain Items for the exclusive use of the disabled
- Minor repairing of bicycles, shoes and leather goods, clothing and
household linen (including mending and alteration)
- Domestic care services such as home help and care of the young, elderly,
sick or disabled
- Admission to museums, art exhibitions, concerts and theatres.
The following supplies are rated at 0% (i.e. Exempt with credit, where no
VAT is charged on the value of the supply but the registered person is entitled
to claim back input VAT incurred in the provision of that supply)
- Food for human consumption
- Pharmaceutical products
- Scheduled bus service (tal-linja)
- Domestic inter-island sea passenger transport
- International passenger transport
- Exports
- Intra-community supplies of goods
(Please note that this information does not replace the provisions of VAT
legislation. This list is not exhaustive and reference to VAT legislation would
be appropriate)
The following supplies are exempt without credit, where no VAT is charged
on the value of the supply but the supplier is not entitled to claim back input
VAT incurred in the provision of that supply. In this case the supplier is not
required to register with the Department.
- Supply of water by a Public Authority
- Supply of buildings and building land
- Supply of Health and Welfare services
- Supply of insurance and financial services
- Letting of immovable property is exempt without credit except in the
following situations:
- Letting for the purposes of accommodation in any hotel or guest house or
similar establishment or in any holiday camp or camping site (at 7%)
- Letting of accommodation in holiday flats required to be licensed in
virtue of the Malta Travel and Tourism Act (at 7%)
- The letting of immovable property by a limited liability company to a
registered person for the economic activity of that registered person (at
18%)
(Please note that this information does not replace the provisions of VAT
legislation. This list is not exhaustive and reference to VAT legislation would
be appropriate)
What happens when an activity changes from taxable or exempt
with credit to exempt without credit?
Where the nature of the use of
property on which input VAT had been claimed has changed from a taxable or
exempt with credit operation to an exempt without credit one part of that input
VAT claimed is to be refunded back to the Department through an adjustment in
the VAT return. Such adjustment should be made within twenty years for immovable
property and within five years for any other property.
For example: if a hotel (taxable activity) is changed to an old people's
home (exempt without credit), some of the input VAT that was claimed will have
to be refunded to the Department. As regards immovable property this should be
worked out as a proportion for a twenty year period, i.e. if the change in
economic activity occurs after ten years, half of the original input VAT claimed
is to be refunded.
If services are deemed to be made outside Malta should they be
accounted for in the VAT return?
In order to determine whether
input tax incurred on supplies made outside Malta may be claimed back or not,
one must establish whether they would, had they been made in Malta, be treated
as taxable supplies or exempt with credit supplies.
In the affirmative, the value of these supplies is to be included in the
VAT return as exempt with credit supplies.
If no right to claim back input tax exists, their value is to be included
in the VAT return as exempt without credit supplies.
What items and services qualify for credit/refund of Input
VAT?
Persons who are registered
with the Department under article 10 (i.e. they have not opted to be classified
as exempt persons) are entitled to claim back so much of the input tax as is
attributable to taxable supplies, exempt with credit supplies and supplies made
outside Malta which, had these been made in Malta, would have been classified as
taxable supplies or exempt with credit supplies.
Where the economic activity of a registered person consists in a mixture
of taxable/exempt with credit supplies and exempt without credit supplies, input
VAT would have to be apportioned by using either the direct method of
attribution or the partial attribution method.
Where the above methods do not give a fair and reasonable result, the
Commissioner is empowered to decide on the percentage of attribution.
However, under the provisions of legislation, certain input VAT incurred
on certain supplies is blocked and cannot be claimed back even when incurred on
expenses relating to the economic activity.
On which items is Input VAT blocked and therefore cannot be
claimed?
Persons who provide exempt
without credit supplies (e.g. insurance companies and education and health and
welfare services), and persons who are classified as exempt persons cannot claim
back input VAT incurred on purchases relating to their business.
No input VAT can be claimed on the following supplies even when such
supplies are purchased in connection with the economic activity of a registered
person, namely input VAT incurred on:
- Tobacco or tobacco products, unless purchased for resale
- Alcoholic beverages, unless purchased for resale
- Works of art and antiques, i.e. paintings, drawings and pastels executed
by hand, other than hand-painted or hand-decorated manufactured articles;
original engravings, prints and lithographs; original sculptures and statuary,
in any material; antiques of an age exceeding one hundred years; collections
and collectors' pieces of zoological, botanical, mineralogical, anatomical,
historical, archaeological, palaeontological and ethnographic interest, unless
purchased for resale
- Motor vehicles, vessels or aircraft, excluding vessels and aircraft
acquired for the purpose of being provided under a charter or hire agreement,
unless purchased for resale or unless acquired and used for the purpose of the
carriage of goods or passengers for a consideration.
- Goods and services for the purpose of repairing, maintaining and keeping
motor vehicles, vessels or aircraft and fuel used therein.
- Car leasing by a lessee, including VAT incurred on fuel
- The supply of any goods and services used in the provision of receptions,
entertainment or hospitality except where that supply is made in the normal
course of an economic activity
- The supply of goods and services used in the provision by a person to his
employees of transport or entertainment, except where the transport is
provided on vehicles with a seating capacity of not less than
seven.
I am a retailer. Am I entitled to a refund of VAT I paid on
commercial vehicles and fuel?
Yes, provided that the vehicle
is a commercial vehicle and it is used in the furtherance of your economic
activity. The Department may however, after verifying and assessing such factors
as the ratio of "business" use to "private" use; the extent of your declared
turnover vis-a-vis the capital expense in purchasing the vehicle and the need
for the purchase of the vehicle in relation to your type of economic activity
etc., adjust your claim for input VAT as it deems necessary.
The VAT law considers as commercial vehicles, motor vehicles designed
mainly for the carriage of goods with seating accommodation normally adjacent to
the driver and which are not normally suitable for the carriage of passengers,
or with seating accommodation for nine persons or more.
Are doctors, accountants and other professionals entitled to a
refund of VAT paid on vehicles and fuel?
The supply of medical services
is classified as exempt without credit and therefore doctors do not charge VAT
and are not allowed any credit on input tax they incur.
Accountants and other professionals are not entitled to claim back VAT
paid on the purchase of a vehicle and that paid on fuel.
What is the difference between a Tax Invoice and a Fiscal
Receipt?
A tax invoice must be issued
when a person registered under Article 10 makes a supply to another registered
person.
A fiscal receipt must be issued when a registered person makes a supply
to a non-registered person.
Tax Invoices
A tax invoice issued by a registered person who is not
classified as an exempt person should contain the following information:
- the date of issue;
- a sequential number, based on one or more series, which uniquely
identifies the invoice;
- the name and address of the supplier and the VAT identification number
under which he made the supply;
- the name and address of the person to whom the supply is made and the VAT
identification number under which the customer acquired the goods or services
supplied to him;
- the quantity and nature of the goods supplied or the extent and nature of
the services rendered;
- the date on which the supply was made or completed or the date on which a
payment on account of the supply was made insofar as that date can be
determined and differs from the date of issue of the invoice;
- the taxable value per rate or exemption, the unit price exclusive of tax
and any discounts or rebates if they are not included in the unit price;
- the VAT rate applied;
- the VAT amount payable, except where a special arrangement is applied;
- where the person liable for payment of VAT is a tax representative in
another Member State, the VAT identification number of that tax
representative, together with his full name and address;
- where the VAT becomes chargeable at the time when the payment is received,
the mention "Cash accounting";
- where the customer receiving a supply issues the invoice instead of the
supplier, the mention "Self-billing";
- where a tax invoice refers to supplies on which no tax is chargeable, it
shall indicate a brief reference to the relevant provisions of the VAT Act, or
the appropriate provisions of Council Directive 2006/112/EC, or any other
indication on the grounds of which no tax is chargeable;
- where the customer is liable for the payment of the VAT, the mention
"Reverse charge";
- where the margin scheme for travel agents is applied, the mention "Margin
scheme - Travel agents";
- where one of the special arrangements applicable to second-hand goods,
works of art, collectors' items and antiques is applied, the mention "Margin
scheme - Second-hand goods"; "Margin scheme - Works of art" or "Margin scheme
- Collector's items and antiques" respectively;
- in an invoice for the intra-Community supply of a new means of transport
the description of the goods supplied shall contain the particulars referred
to in the definition of "new means of transport" in the VAT Act.
In the case of a local transaction where the taxable person liable for
VAT is not liable to pay VAT and the amount of the invoice inclusive of the tax
is not higher than €100, or where the registered person making the supply is an
exempt person, a simplified invoice may be used. Such simplified invoice shall
contain at least the following details:
- the date of issue;
- a sequential number, based on one or more series, which uniquely
identifies the invoice;
- the name, address and the Value Added Tax identification number of the
supplier;
- the Value Added Tax identification number of the person to whom the supply
is made;
- a description sufficient to identify the goods and services supplied;
- the total amount of tax payable or the information needed to calculate it;
- where the invoice issued is a document or message treated as an invoice,
specific and unambiguous reference to that initial invoice and the specific
details which are being amended.
Fiscal Receipts
Retailers and persons whose activity consists in the
supply of food in the course of catering (e.g. restaurants and snack bars) must
issue a fiscal receipt by means of a fiscal cash register.
Service providers must issue a manual fiscal receipt from manual fiscal
receipt books supplied by the Department on application.
The Fiscal Cash Register and manual fiscal receipts should be kept at the
premises where the economic activity is intended to be carried out.
Taxi drivers must issue fiscal receipts by means of a fiscal taximeter.
Registered persons who intend to use computerised receipts must seek
prior approval in writing from the Department. On approval the exemption number
issued by the Department should be shown on the receipt, or by an electronic
means.
Admission tickets to events may also accepted as fiscal receipts provided
that prior approval in writing is sought from the Department. The VAT permit
number issued by the Department should be shown on the ticket.
What does make a receipt a Fiscal Receipt?
A fiscal receipt is considered
as such when issued in one of the following situations:
- By means of an approved fiscal cash register
- On manual fiscal receipt books supplied by the Department
- By means of a computerized or electronic system or a point of sale system,
provided that prior approval has been obtained from the Department and the
exemption number issued by the Department is printed on the receipt
- On application and following approval by the Department, tickets of
admission to a function may be approved as fiscal receipts provided that the
information as required in writing by the Department is printed on each ticket
- By means of a fiscal taxi-meter.
Since medical, health and education services are exempt without
credit, is it necessary for persons supplying these services to issue fiscal
receipts?
Persons who provide exempt
without credit supplies are not required to issue fiscal receipts, although they
are still obliged to issue an ordinary receipt under other existing legislation.
Such persons are not required to register with the Department.
I am a non-exempt registered person. If I supply goods or
services to people who are exempt without credit, do I have to issue a tax
invoice or a fiscal receipt?
You must issue a fiscal
receipt. Fiscal receipts must always be issued for supplies of goods or services
to people who are exempt without credit. It does not matter whether the supplier
is a non-exempt registered person or an exempt registered person.
I am a retailer. When should I issue a fiscal receipt and when
should I issue a tax invoice?
A retailer and a person who
supplies food in the course of catering (e.g. restaurant or snack bar) should
always issue a fiscal receipt for each and every supply made (except in the
cases where legislation allows certain supplies to be covered by a fiscal
receipt to be issued at the end of the day to cover the supplies made during
that day). This applies both to taxable supplies and to exempt with credit
supplies.
Where a retailer makes a taxable supply to another registered person the
latter may request the retailer to issue a tax invoice instead of a fiscal
receipt.
A fiscal receipt issued by means of a fiscal cash register may be
accepted as a tax invoice if it includes the details above which are required in
a tax invoice.
If there is a power failure, can I issue one receipt manually to
cover all the sales during the time the failure lasted?
If there is a power failure a
registered person must issue a manual fiscal receipt for each and every supply
made.
The same applies when a cash register is out of order. However the
registered person concerned is obliged to ensure that his fiscal cash register
is repaired within a very short time.
I am a retailer and classified as an exempt person. When I issue
fiscal receipts are goods sold which would normally be subject to VAT to be
indicated as 'E' or as 'F'?
When a retailer who is
classified as an exempt person issues a fiscal receipt by means of a fiscal cash
register on the sale of a supply which would have been taxable had it not been
for that classification, the tax rate to be indicated on that fiscal receipt
should be 'F' and not 'E'.
Is there any category of registered persons to which different
arrangement for the issue of a fiscal receipt apply?
Yes, the categories of
business shown hereunder are entitled to issue one fiscal receipt at the end of
the day to cover sales of supplies made during the day:
- Registered persons who make supplies from a vehicle either by door-to-door
delivery or to the general public in a public road, of gas, milk and milk
products or bread.
- A registered person who makes supplies of fuel from pumps.
- A registered person who makes supplies of food and beverages situated in a
work or study area, after authorisation had been requested and granted in
writing by the Department to issue one fiscal receipt at the end of the day to
cover supplies of food made during that day and another fiscal receipt to
cover supplies of beverages made during that day.
- A registered person who makes supplies of bread from the bakery where that
bread has been baked.
In the case of the registered persons referred under the 3rd and 4th
bullets above, the Department may, at any time, withdraw the authorisation by
means of a notice in writing.
What kind of books and records do I need to keep and how long do
I need to preserve these records and books?
You need to keep the following
records and documents: p>
- Copies of Fiscal Receipts issued
- Fiscal cash register FCR Z Readings
- All Customs import/export documentation
- Purchases and Sales Invoices
- Debit and Credit Notes
- Cash Books and Petty Cash Books
- Day Purchases and Sales Ledger
- Value Added Tax Account and Annual VAT Account
- Bank Account connected with the business
- Any other records and documents relevant to your economic activity
You are obliged to retain these records and documents for six years as
the Department may request them for inspection.
However in cases where the provisions for adjustment of input tax on
capital goods and on immovable property applies, the six years shall start to
run from the end of the five year period or twenty years period respectively as
the case may be.
What are the reasons and the purpose of an inspection by the VAT
Department?
Inspections by the VAT
Department are intended to:
- Educate registered persons about their rights and obligations vis-a-vis
VAT;
- Check the tax liability of a registered person to ensure that the right
amount of tax is being collected and submitted to the Department;
- Examine and verify claims for refunds made by registered persons;
- Exercise control on the business activity of registered persons by
examining their business records and books of account to ensure that no
under-declaration of output tax and/or over-declaration of input tax is being
made;
- Spot-check registered person's establishments to ensure that fiscal
receipts are being issued to clients on sale of a
product/service.
When a VAT inspector announces an inspection visit, can I ask to
change the proposed date or can I refuse to receive the Inspector?
You definitely may contact the
VAT Inspector to agree on a convenient day for both to set up an appointment.
However, you cannot refuse to receive the Inspector as this goes against the
law.
You are also advised that the VAT inspector may request any person to
produce, or may remove from any person, including a third party, the records,
documents, accounts and electronic data required to be kept by him and to make
copies thereof.
If the VAT Inspector at the end of an inspection visit contends
that I made mistakes and I don't agree with the inspector, what can I
do?
The VAT Inspector is obliged
at the end of a visit, to discuss areas of disagreement with you. If
disagreement still persists and in the opinion of the VAT Inspector your
mistakes resulted in tax being under-declared or input VAT being over-declared
the Department will proceed to raise "Provisional Assessments".
When you receive notice of a "Provisional Assessment" you are to register
within 30 days, if you so wish, a "Request for a Review" with the Department
stating precisely and specifically your reasons for disagreement.
This "Request for a Review" will be processed by a Review Officer who
after conducting the necessary verifications may cancel, adjust or confirm the
provisional assessment.
What are the conditions for a registered person to lodge an
appeal?
In order to be valid an appeal
against an assessment submitted to the Administrative Review Tribunal must
satisfy the following criteria:
- a return for the tax period to which the assessment refers has been
delivered to the Commissioner before the appeal is entered;
- all tax payable by the appellant which is not in dispute has been paid;
- it is made within thirty days from the date of the service of the notice
against which the appeal is made;
- it is made in such form and in such manner as may be prescribed under the
Administrative Justice Act;
- a payment of such fees for lodging an appeal as may be prescribed under
the Administrative Justice Act has been made.
Is a non-profit making organisation required to register for
VAT?
Services made to members of
non-profit making organisations are exempt without credit and the organisation
is not required to register for VAT.
However, where the organisation provides other services against payment,
each supply will have to be considered in the context of VAT legislation.
The following are some examples where a non-profit organisation will be
required to register with the Department, and subject to its right and option to
be classified as an exempt person, charge and collect VAT:
- operating a bar for its members
- renting of space to third parties to be used as a bar
- selling of advertising space in its magazine
- Fund raising activities, except were the beneficiary of such activities
will be a health, welfare or education institution. In such cases the
Department's prior permission for the exemption will be required.
If a non-profit making organisation is required to register with the
Department and does not opt to be classified as an exempt person, its right to
claim input tax is limited to the supplies on which VAT is collected, either by
directly attributing its inputs or by partially attributing such inputs.
Am I required to account for VAT on accruals or on a cash
basis?
As a general rule all
registered persons must account for VAT on an invoice (accruals) basis. However,
the Department may direct that accounting for VAT for the following suppliers be
made on a cash basis:
- Retailers.
- Supplies by civil, mechanical and electrical engineering
contractors.
Supplies of professional services where the person supplying those
services holds a warrant issued under any law in force in Malta to practice that
profession are to account for VAT on a cash basis. In order to account for VAT
on invoice basis people who provide such services must request authorisation in
writing from the Department.
When a registered person accounts for VAT on cash basis such accounting
must be made in respect of supplies made to him and supplies made by him.
After compiling and submitting my tax returns I destroyed the
invoices, as I sincerely did not know that I was obliged to retain them for six
years. What is my position with the Department particularly with respect to my
Input VAT?
By destroying your invoices
you seriously jeopardised your claim for Input VAT since Input VAT may only be
allowed if backed by a valid tax invoice. Failure to produce valid tax invoices
for inspection by the Department would result in an assessment being raised to
annul your Input VAT claim.
Recently I moved house and duly changed my ID Card. I was under
the impression that the ID Cards Department would inform the VAT Department
about my change of address, but I continued to receive my tax returns at the old
address. What is the procedure one has to follow in such cases?
Registered persons are
required to inform the Department with any changes, including change of address,
changes in details appearing on the registration application and the cessation
or transfer of business or part thereof, within fifteen days from that
change.
The information provided in
the answers should serve only as guidance and does not have any legal
force.
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