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Malta implements e-Commerce VAT package rules

Deloitte Malta Tax Alert

01 October 2018

On 20 September 2018, Regulations implementing Council Directive 2455/2017 in Malta were published by means of the below Legal Notices (L.N.):

  • L.N. 297 - Value Added Tax Act (Amendment of Third Schedule) Regulations;
  • L.N. 298 - Value Added Tax Act (Amendment of Twelfth Schedule) Regulations; and
  • L.N. 299 - Value Added Tax Act (Amendment of Fourteenth Schedule) Regulations.

This Tax Alert outlines the salient features of these Regulations, which enter into force on 1 January 2019.

L.N. 297/2018: Place of supply of telecommunications, broadcasting and electronic services to non-taxable persons

As of 1 January 2019, the place of supply of telecommunications, broadcasting and electronic services (TBES) to non-taxable persons shall be determined in accordance with the general place of supply rule (i.e. the place where the supplier is established) where:

  • The supplier of such services is established in Malta, or has his permanent address or usual residence only in Malta; and
  • The customers are non-taxable persons who are established, have their place of permanent address or usual residence in any Member State other than Malta; and
  • The total value of such supplies (exclusive of VAT) does not in the current calendar year exceed EUR10,000 and did not do so in the course of the preceding calendar year.

However, where, during a calendar year, this threshold is exceeded, the special rule determining the place of supply of TBES to non-taxable persons (i.e. the place where that person is established, has his permanent address or usually resides) shall be applicable as of that time, and the supplier may opt to apply the Mini One Stop Shop (MOSS) simplification measure.

In addition, suppliers falling within the scope of this provision have the right to opt for the place of supply to be determined in accordance with the special rule mentioned above, which option shall in any event cover two calendar years. Exercise of this right shall require a written notice to be furnished to the Commissioner for Revenue specifying the date from which it applies, which date cannot be earlier than thirty days from the date on which it is furnished.  

L.N. 298/2018: Simplified invoicing

As of 1 January 2019, the issuance of a tax invoice shall be governed by the rules applicable in the Member State where the supplier making use of one of the special schemes for TBES (i.e. EU and non-EU MOSS schemes) is identified. In Malta, persons supplying TBES under MOSS are exempt from the requirement to issue VAT fiscal receipts.

L.N. 299/2018: Non-EU MOSS scheme

As of 1 January 2019, a “taxable person not established within the Community" is defined “a taxable person who has not established his business in the territory of the Community and who has no fixed establishment there”. The additional condition under existing rules whereby in order for a person to qualify as being established outside the Community, such person should also not be required to be identified for VAT purposes under article 10 of the Malta VAT Act, is therefore being removed.

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