Malta sets VAT transition rules for gaming supplies from 1 October

The guidance applies the narrowed gambling exemption

Legal Notice 86 of 2026 replaced item 9 of Part Two of the Fifth Schedule to the Value Added Tax Act and took effect on 1 October 2026. The replacement exempts only betting, lotteries and other gambling approved by the Minister. The Commissioner’s accompanying exemption guideline identifies low-risk games under the Gaming Authorisations Regulations, occasional approved junkets and physically accessible betting facilities at the site of a real-life sporting event. The transition guidance’s gaming example confirms that online sports betting therefore became taxable from 1 October, while online casino services were already taxable.^[1][2][3][4]

Performance determines treatment across the transition

For a service spanning the transition, the VAT treatment follows when the service is performed, rather than simply the invoice date or the time tax becomes chargeable. The Fourth Schedule continues to determine the VAT period in which tax is accounted for, but a continuous supply must be divided between the pre- and post-transition periods. Equal allocation is acceptable where it reflects the agreement and economic reality. If an earlier invoice treated the whole supply as exempt, the Commissioner accepts a corrective invoice reflected in a current VAT return.^[1][3]

Input tax follows actual attribution and use

Article 22 and items 5 and 6 of the Tenth Schedule govern recovery. Input VAT exclusively attributable to taxable supplies is recoverable; VAT attributable only to exempt-without-credit supplies is not; and mixed costs require partial attribution, followed by the definitive adjustment for the year concerned. The same approach applies to reverse-charged services. In the guidance’s online-gaming examples, endorsement and marketing costs used before and after 1 October are allocated by their actual use and, where mixed, by the operator’s provisional ratio with a later true-up.^[1][3]

Operators should revisit contracts and capital-goods adjustments

Gaming operators should identify supplies and supplier costs crossing 1 October, test whether invoices require correction, and preserve the basis for any time or use allocation. They should also assess annual favourable adjustments for capital goods under the Value Added Tax (Adjustments Relating to Input Tax on Capital Goods) Regulations: the guidance refers to one-fifth of input tax for capital goods other than immovable property and one-twentieth for immovable property. The rules affect reporting and recovery timing as well as the VAT charged to customers.^[1][3][5]