Malta explains VAT transition for gambling supplies

The guidance applies generally when Malta’s VAT treatment changes, and is directly relevant to gambling and betting operators affected by Legal Notice 86 of 2026. That instrument substituted item 9 of Part Two of the Fifth Schedule to the Value Added Tax Act, Chapter 406, and took effect on 1 October 2026. From that date, the exemption covers only betting, lotteries and other gambling approved by the Minister.^[1][3]

Output VAT follows performance

For supplies spanning the change, the Commissioner distinguishes the applicable VAT treatment from the time at which tax becomes chargeable. The Fourth Schedule continues to determine the return period in which VAT is accounted for. However, whether the pre-transition exemption or post-transition taxable treatment applies is determined by when the underlying services are performed.^[1][2]

A continuous service must therefore be divided between the pre-transition and post-transition periods where an invoice covers both. If the agreement provides no more accurate allocation and equal delivery reflects the economic reality, the consideration may be apportioned evenly across the service period. An earlier invoice applying exempt treatment may require correction where part of the service is taxable after the change.^[1]

Input tax must be matched to use

Article 22(4) and items 5 and 6 of the Tenth Schedule govern input-tax recovery. Input VAT wholly attributable to supplies that were exempt without credit before the transition remains irrecoverable. Input VAT attributable to taxable post-transition supplies may qualify for recovery, while costs used for both categories require partial attribution and the annual reconciliation required by the Tenth Schedule.^[1][2]

The Commissioner’s examples apply those principles to marketing, endorsement and overseas services used across the 1 October transition. The invoice date or the date VAT becomes chargeable does not by itself determine recovery. Malta-based groups should map contracts, invoices, reverse-charge entries and shared costs to the actual period of use, and retain evidence supporting allocations, corrective invoices and input-tax adjustments.^[1][2]