Cap. 406, Eighth Schedule
Malta VAT rates: 18% standard, and the 12%, 7% and 5% cases
Updated
Malta has one standard rate and three reduced rates, attached to closed lists, not broad categories. Knowing which list a supply is on matters more than the rates.
Question 1
Where is the business established?
Establishment is decided by article 2(2) and 2(3) of the VAT Act, not by where the company is incorporated alone.
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The standard rate
Article 19(1) of the Value Added Tax Act charges tax on every taxable supply, other than one specified in the Eighth Schedule, at eighteen per cent of the taxable value. Article 19(4) applies the same 18% to taxable importations. Article 19(2) caps the Eighth Schedule rates at no higher than 18% and no lower than 5%.
The reduced rates, and what sits on each
| Rate | Examples from the Schedule |
|---|---|
| 7% | Letting or provision of accommodation in premises required to be licensed under the Malta Travel and Tourism Services Act; use of sporting facilities |
| 12% | Custody and management of securities; management of credit and credit guarantees by a person other than the grantor; short hires of a pleasure boat up to five weeks; care of the human body by a professional regulated under the Health Care Professions Act, other than exempt medical care |
| 5% | The supply of electricity; listed consumable goods, medical accessories and printed matter by customs tariff code; items for the exclusive use of disabled persons; minor repairs to bicycles, shoes, leather goods, clothing and household linen; domestic care services; admission to museums, art exhibitions, concerts and theatres; importation of works of art, collectors' items and antiques |
| 18% | Everything else that is a taxable supply |
The accommodation entry carries its own apportionment rule. Where the price includes goods or services outside the meaning of accommodation, eighty per cent is the taxable value of the accommodation. The other twenty per cent is treated as supplies not described in that column.
VAT for taxi fares in Malta
Malta's transport exemption is a closed list. Item 11 of Part One of the Fifth Schedule exempts scheduled bus services and scheduled Malta to Gozo passenger sea transport. It also exempts special regular services carrying pupils or workers, and scheduled passenger transport by public lift.
Taxis and chauffeur-driven hire are not on it, and no Eighth Schedule rate names passenger transport. So a taxi fare within Malta is taxable at the 18% standard rate when the operator is registered under Article 10. Item 4 of the same Part exempts the international transport of persons. Read in the VAT Act as consolidated on 1 October 2026.
Reduced rate is not the same as exempt
- Exempt with credit supplies, in Part One of the Fifth Schedule, bear no VAT but preserve the right to input tax credit. Exports and intra-community supplies are the usual examples.
- Exempt without credit supplies, in Part Two of the Fifth Schedule, bear no VAT and carry no input tax credit: most letting and transfer of immovable property, insurance by licensed insurers, credit and banking services, health and welfare, education, postal services, public broadcasting and water services.
- The line moves. Legal Notice 86 of 2026 replaces the gambling entry in Part Two with effect from 1 October 2026, and Legal Notice 75 of 2026 adds scheduled passenger transport by public lift to the exempt list in Part One.
Rates and schedules move by legal notice several times a year. Everything here comes from the Value Added Tax Act on legislation.mt at a point in time of 27 March 2026, plus the two 2026 legal notices named above. Check the current Schedule before pricing a supply, and take advice where a supply could fall on more than one list.