Understanding VAT

If you are doing any business activities, you are considered a taxable person and typically must register for VAT under Article 10. However, if your annual turnover is below a certain threshold, you can choose to register under Article 11 as an exempt person.

Under what registration type should you register?

1. Article 10 Registration:

Who Qualifies: Those with an annual turnover above the exempt threshold.

What is Required:

·???????Charge VAT on taxable sales.

·???????Reclaim VAT on expenses related to your taxable activities, subject to certain conditions.

·???????Use a VAT number that starts with "MT".

·???????Issue fiscal receipts or tax invoices for all sales.

·???????File a VAT return every three months, no later than six weeks after the period ends, or as instructed by the Commissioner.

2. Article 11 Registration (Exempt):

Who Qualifies: Those with an annual turnover below the entry threshold.

What is Required:

·???????No VAT charged on sales.

·???????Cannot reclaim VAT on expenses.

·???????Use an identification number without the "MT" prefix.

·???????Issue fiscal receipts for all sales.

·???????Submit a simplified tax return by March 15th of each year.

Option: You can choose to register under Article 10 to charge and reclaim VAT, but you must remain under Article 10 for at least 36 months before you can switch to Article 11, provided you meet the exit threshold.

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3. Article 12 Registration:

Who Qualifies: Non-taxable legal persons or taxable persons not registered under Article 10 who have made intra-community acquisitions in Malta exceeding €10,000 since the start of the year.

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What’s Required:

·???????Register for VAT under Article 12 and pay VAT in Malta for these intra-community purchases.

·???????If registered under Article 11, you also need to register under Article 12 to get a valid identification number for intra-community acquisitions.

Decision Criteria:

·???????Article 10: Register if annual turnover exceeds €35,000 (goods) or €30,000 (services).

·???????Article 11: Register if annual turnover is below €35,000 (goods) or €30,000 (services), and you do not intend to charge VAT.

·???????Article 12: Register if you are involved in intra-community acquisitions exceeding €10,000, regardless of other turnover thresholds.

These registration types and thresholds help businesses in Malta determine their VAT obligations based on their turnover and business activities. Always ensure compliance with local tax regulations and consult with a tax advisor if needed to determine the appropriate VAT registration type.?

So what documents do you need to register for VAT??

·???????A copy of the applicant's ID card or passport.

·???????For a Limited Liability Company, the ID card or passport of the authorised representative.

·???????For a Limited Liability Company or a registered partnership, a copy of the Memorandum and Articles of Association.

How can you register for VAT??

You can register for VAT by clicking?here.?You can either fill in the online form or print it, fill it in and send it to the address provided on the page.??

If you encounter any difficulties while registering for VAT or have any concerns or questions, please do not hesitate to reach out to us. This can be done by calling our FREEPHONE 153, visiting our?website, or using our chatbot. You can also drop by?Business First.?

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