The 2012 worldwide VAT, GST and sales tax guide

432 M ALTA
• 1% of the excess, if any, of the output tax due over input tax
(and any allowable deductions) for the first VAT period following
registration
• €20 for every month or part of a month that the registration is late
D. VAT rates
The term “taxable supplies” refers to supplies of goods and services
that are liable to VAT (at the standard rate of 18% or the
reduced rates of 5% or 7%). The term “exempt supplies” refers to
supplies of goods and services not liable to tax and that do not give
rise to a right of input tax deduction (see Section F). Some supplies
are classified as “exempt with credit,” which means that no VAT is
chargeable, but the supplier may recover related input tax. Exempt
with credit supplies include exports of goods and related services
to third territories (that is, territories outside the EU).
In Malta, the following three VAT rates apply:
• Standard rate: 18%
• Reduced rates: 5% and 7%
The standard rate of VAT applies to all supplies of goods or services,
unless a specific measure provides a reduced rate or an
exemption.
The following tables list examples of exempt supplies of goods
and services, and supplies of goods and services that are taxed at
a reduced rate of VAT (these lists are not exhaustive).
Examples of exempt supplies of goods
and services (without credit)
Letting and transfer of immovable property
Health and welfare
Education
Postal services
Banking and insurance
Grant and negotiation of credit and the management of credit by
the grantor
Supply by nonprofit organizations of approved services related to
sports or physical recreation
Sports
Lotteries
Broadcasting
Water
Examples of exempt with credit supplies of
goods and services (0% rate)
Food, excluding catering
Pharmaceutical goods
International transport
Exports of goods and related services
Supplies to ships
Supply of gold to the Central Bank of Malta
Examples of supplies of goods and services taxable at 5%
Confectionery
Medical equipment and accessories
Printed matter
Supply of electricity