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ARTICLE · 11 OCTOBER 2023

New Reduced VAT Rate Of 12% Applicable On Certain Services

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On the 6th of October, Legal Notice 231 of 2023 ("Legal Notice") was published in the government gazette, adding new services to the list found under the Eighth Schedule of the Value Added Tax Act...

MaltaTax
Joselyn Teuma
Joselyn Teuma
Martina Grech
Martina Grech
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On the 6th of October, Legal Notice 231 of 2023 ("Legal Notice") was published in the government gazette, adding new services to the list found under the Eighth Schedule of the Value Added Tax Act (Chapter 406 of the Laws of Malta) ("VAT Act") which will be taxed at a lower rate than 18%. The Legal Notice transposes paragraph 5 of Article 105a of Council Directive 2006/112/EC of 28 November 2006 as amended by Council Directive (EU) 2022/542 of April 2022 which obliges Member States wishing to apply reduced rates not lower than 12% on certain transactions to publish detailed rules governing such by the 7th of October 2023.

The Eighth Schedule to the VAT Act lays down the rate of tax to be charged on specific supplies or the importation of such supplies which benefit from a reduction from the standard tax rate of 18%. By virtue of this Legal Notice, four new items have been added, all of which are to be taxed at the rate of 12%. The four types of services are:

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