ACT No. XXXVIII of 2024 AN ACT to amend the Value Added Tax Act, Cap. 406.

I assent.

(L.S.)

MYRIAM SPITERI DEBONO

President

17th December, 2024

ACT No. XXXVIII of 2024

AN ACT to amend the Value Added Tax Act, Cap. 406.

BE IT ENACTED by the President, by and with the advice and

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same as follows:-

(1) The short title of this Act is the Value Added Tax Short title and

(Amendment) Act, 2024 and this Act shall be read and construed as commencement.

one with the Value Added Tax Act, hereinafter referred to as the Cap. 406.

"principal Act".

(2)

This Act shall come into force on 1st January 2025.

The arrangement of Act shall be amended as follows

Amendment to

the Arrangement

of Act.

(a) the words "FIFTH SCHEDULE Exemptions Part

One - Exempt with credit supplies Part Two - Exempt without

credit supplies Part Three - Exempt intra-community

acquisitions Part Four - Exempt importations Part Five –

Definitions" shall be substituted by the words "FIFTH

SCHEDULE Exemptions";

(b) the words "SIXTH SCHEDULE Thresholds Part One

- Small undertakings Part Two - Acquisitions threshold Part

Three - Distance sales threshold" shall be substituted by the

words "SIXTH SCHEDULE Small Enterprises"; and

(c) the words "FOURTEENTH SCHEDULE Special

Cases Part One - Professional services Part Two - Second-hand

goods, works of art, collectors’ items and antiques Part Three -

Supplies by retailers and by civil, mechanical and electrical

engineering contractors Part Four - Travel agents Part Five - Tax

in danger Part Six - Investment gold Part Seven - Special scheme

for electronically supplied services" shall be substituted by the

word "FOURTEENTH SCHEDULE Special Cases".

Article 2 of the principal Act shall be amended as follows

(a) in the definition "acquisitions threshold" the words

"Part Two of the Sixth Schedule" shall be substituted by the

words "Part Three of the Third Schedule";

(b) immediately after the definition of "customs duty

suspension regime" there shall be added the following new

definitions

""Council Directive 2006/112/EC" means Council

Directive 2006/112/EC of 28 November 2006 on the

common system of value added tax, as may be amended

from time to time;

"Council Regulation (EU) No. 904/2010" means

Council Regulation (EU) No. 904/2010 of 7 October 2010

on administrative cooperation and combating fraud in the

field of value added tax (recast), as may be amended from

time to time;";

(c) immediately after the definition "Tribunal" there

shall be added the following new definition

""VAT" or "value added tax" shall mean any value

added tax as referred to in Council Directive 2006/112/

EC;".

Article 4 of the principal Act shall be amended as follows

(a) paragraph (a) thereof shall be substituted by the

following new paragraph

"(a) on every supply of goods or of services that

takes place in Malta made on or after 1 January 1999 for

consideration by a taxable person acting as such;";

(b) paragraph (b)(i) thereof shall be substituted by the

following new sub-paragraph

"(i) it is an acquisition of goods, other than new

means of transport and excise goods, made by a taxable

person acting as such, or a non-taxable legal person, where

the vendor is a taxable person acting as such who is not

eligible for the exemption for small enterprises provided

for in Article 284 of Council Directive 2006/112/EC and

where such vendor is not covered by Articles 33 and 36 of

the said Directive;".

Article 10 of the principal Act shall be amended as follows

Amendment of

article 10 of the

principal Act.

(a) the proviso to sub-article (4) thereof shall be

substituted by the following new provisos

"Provided that such person shall be relieved of

the obligation to be registered in accordance with this sub-

article when such person notifies the Commissioner that

any of the special schemes provided for in accordance with

Chapter 6 of Title XII of Council Directive 2006/112/EC

shall be used to declare and pay the tax which such person

is liable to pay, in line with the provisions of the respective

special scheme, by not later than ten (10) days from the

date of such supply

Provided further that a taxable person who is

not established in Malta but is established in another

Member State shall be relieved of the obligation to be

registered in accordance with this sub-article when the

Commissioner is notified, and approves, the use by such

person of the special scheme for small enterprises provided

for in accordance with Chapter 1 of Title XII of Council

Directive 2006/112/EC.";

(b)

sub-article (6) thereof shall be amended as follows

(i) paragraph (c) thereof shall be substituted by the

following new paragraph

"(c) any person whose registration under

article 11 is cancelled in accordance with sub-articles

(6), (7) or (8) thereof, in cases where such person

would be liable to apply for registration under this

article;";

(ii)

immediately after paragraph (c) thereof, as

substituted, there shall be added the following new

paragraph

"(d) any person whose registration under

article 11B is cancelled in accordance with sub-

article (3) thereof, in cases where such person would

be liable to apply for registration under this article.";

(c) sub-article (7) thereof shall be substituted by the

following new sub-article

"(7) A registration in accordance with paragraphs

(a) and (d) of sub-article (6) shall take effect as from the

date the taxable person should have been registered under

this article. A registration in accordance with paragraph (c)

of sub-article (6) shall take effect as from the date the

registration under article 11 is cancelled. A registration in

accordance with paragraph (b) of sub-article (6) shall take

effect as from the date such person applies to be registered

under this article.";

(d) in sub-article (9) thereof the words "Council

Regulation (EU) No. 904/2010 of the 7th October 2010, or of

any other Council Regulation (EU) which substitutes or amends

the said Council Regulation (EU)" shall be substituted by the

words "Council Regulation (EU) No. 904/2010";

(e) immediately after sub-article (9), as amended, there

shall be added the following new sub-article

"(10) A person registered under this article who

ceases to be required or entitled to be registered under this

article, if he were not so registered, shall within fifteen (15)

days from the occurrence of this event apply with the

Commissioner to cancel his registration under this article.".

Article 11 of the principal Act shall be substituted by the

following new article

(1) When a taxable person established in Malta

who is not registered under this article qualifies as a small

enterprises for

enterprise in terms of the provisions of Part One of the

supplies made

Sixth Schedule he may apply to the Commissioner to be

registered under this article.

(2) The Commissioner shall register under this

article any person who has submitted an application under

sub-article (1) if he is satisfied that such person is eligible

for such registration in accordance with the provisions of

Part One of the Sixth Schedule

Provided that such registration shall only take

effect as from the date the Commissioner receives the

application under sub-article (1) from the taxable person,

or from the date of commencement of the economic

activity of the taxable person, whichever is the later.

(3) Any person registered under this article shall be

subject to the provisions of Part One of the Sixth

Schedule.

(4) When a person is, immediately before his

registration under this article, registered under article 10

the Commissioner shall, upon the registration of such

person under this article, cancel the registration under

article 10.

(5) A person registered under this article

(a) may, at any time, apply to the

Commissioner for the cancellation of his

registration under this article;

(b) shall, within fifteen (15) days from the

date on which such person no longer qualifies as a

small enterprise in terms of the relevant provisions

of Part One of the Sixth Schedule, apply to the

Commissioner for the cancellation of the said

registration;

(c) shall, within fifteen (15) days from the

cessation of his economic activity, apply to the

Commissioner for the cancellation of such

registration.

(6) When a taxable person submits an application for

the cancellation of his registration under this article

pursuant to paragraph (a) of sub-article (5), such

cancellation shall apply with effect from the first day of

the following calendar month.

(7) When a taxable person submits an application for

the cancellation of his registration under this article

pursuant to paragraph (b) of sub-article (5), such

cancellation shall apply with effect from the first day of

the calendar month following the date on which such

taxable person no longer qualifies as a small enterprise.

(8) Where the Commissioner has reason to believe

that the taxable person no longer qualifies as a small

enterprise in terms of the relevant provisions of Part One

of the Sixth Schedule, the Commissioner shall cancel the

registration of that taxable person under this article with

effect from the date that such taxable person no longer

qualifies as a small enterprise as may be determined by

the Commissioner

Provided that the Commissioner shall

immediately upon the cancellation of a registration under

this article, register that person under article 10 if, in the

opinion of the Commissioner, such person is liable to

apply for registration in terms of the said article.

(9) Without prejudice to sub-articles (6), (7) and (8),

the Commissioner may at any time cancel the registration

of a person under this article if he has reason to believe

that such person does not carry on or has ceased to carry

on an economic activity or that it is not likely that his

economic activity shall include any activities other than

those exempt activities without credit supplies.

(10) Without prejudice to the other provisions of this

article, a taxable person registered under this article

which carries out any of the following transactions shall

also be required to register under article 12 in accordance

with the provisions thereof if such person

(a) makes intra-Community acquisitions of

goods subject to VAT pursuant to article 4(b);

(b) receives services for which he is liable

to pay VAT pursuant to article 20;

(c) supplies of services within the territory

of another Member State for which VAT is payable

solely by the recipient.".

7. Immediately after article 11 of the principal Act, as

substituted, there shall be added the following new articles

(1) A taxable person established in Malta

qualifying as a small enterprise in terms of the provisions

enterprises for

of Part Two of the Sixth Schedule, who makes supplies of

supplies made

goods and services within the territory of another Member

State, and who intends to avail of the exemption in terms

of the special scheme for small enterprises applicable in

the respective Member State in which the supplies are

made in accordance with Chapter 1 of Title XII of

Council Directive 2006/112/EC, may apply to the

Commissioner to be registered under this article.

(2) The Commissioner shall register under this

article any person who has submitted an application under

sub-article (1) if he is satisfied that that person is eligible

for such registration in accordance with the provisions of

Part Two of the Sixth Schedule

Provided that such registration shall only take

effect as from the date notified by the Commissioner to

the taxable person.

(3) Any person registered under this article shall be

subject to the provisions of Part Two of the Sixth

Schedule.

(4) A person registered under this article

(a) may, at any time, apply to the

Commissioner for the cancellation of his

registration under this article;

(b) shall, within fifteen (15) working days

from the date on which such person is no longer

eligible to avail of the special scheme for small

enterprises in terms of the provisions of Part Two of

the Sixth Schedule in any Member State, apply to

the Commissioner for an update or cancellation of

such registration, as the case may be;

(c) shall, within fifteen (15) working days

from the date on which the Union annual turnover

of that person referred to in the Sixth Schedule

exceeds the Union threshold referred to in the same

Schedule, apply to the Commissioner for the

cancellation of the said registration.

(5) The Commissioner shall cancel the registration

of a person under this article with immediate effect

(a) in cases where the Commissioner has

reason to believe that the taxable person is no longer

eligible to avail of the special scheme for small

enterprises in terms of the provisions of Part Two of

the Sixth Schedule;

(b) if

such

person

notifies

the

Commissioner through the established web portal

designated for this purpose by the Commissioner,

that such person no longer intends to avail himself

of the special scheme for small enterprises in all

Member States, or whose Union annual turnover

referred to in the Sixth Schedule exceeded the

Union threshold referred to in the said Schedule;

(c) if

such

person

notifies

the

Commissioner through the established web portal

designated for this purpose by the Commissioner, or

it may otherwise be presumed by the Commissioner,

that the economic activity of such person has

ceased.

(1) A taxable person who is not established in

Malta but is established in another Member State shall be

enterprises for

deemed to have applied to register under this article once

established in the Commissioner is notified by the Member State in

which such person is established in accordance with

Chapter Xa of Council Regulation (EU) 904/2010 of the

person’s intention to avail itself of the exemption for

small enterprises in relation to supplies of goods and

services made in Malta

Provided that the registration of such person

under this article shall only be deemed to be effective as

from the date the Commissioner notifies the Member

State of establishment, through the designated electronic

means for this purpose, of his approval to register the said

person under this article in accor dance wit h the

provisions of Part Three of the Sixth Schedule.

(2) The Commissioner shall notify by electronic

means the Member State of establishment of his approval

or otherwise in accordance with sub-article (1) within

fifteen (15) working days after receiving the information

referred to in Article 37a(1)(a) of Council Regulation

904/2010.

(3) The Commissioner may cancel the registration of

a person under this article with immediate effect where

the Commissioner has reason to believe that the taxable

person is no longer eligible to avail himself of the special

scheme for small enterprises in terms of the provisions of

Part Three of the Sixth Schedule and notify the Member

State of establishment of such person without delay of the

date on which the said person has ceased to be eligible for

the exemption for small enterprises in relation to supplies

of goods and services made in Malta.

(4) The Commissioner may cancel the registration of

a person under this article with immediate effect where

the Commissioner is notified pursuant to Article 37a of

Regulation (EU) 904/2010 that the person intends to

cease to apply the exemption for small enterprises to

supplies of goods and services in Malta, or is not eligible

to benefit from such an exemption.".

8. Article 12 of the principal Act shall be amended as follows

Amendment of

article 12 of the

principal Act.

(a) immediately after sub-article (3) thereof there shall

be added the following new sub-article

"(3a) A taxable person established in Malta, other

than a taxable person registered under article 10, who

supplies services within the territory of another Member

State for which VAT is payable solely by the recipient of

the service pursuant to Article 196 of Council Directive

2006/112/EC, shall apply to be registered under this article

by not later than the date on which he supplies such

service.";

(b) sub-article (4) thereof shall be substituted by the

following new sub-article

"(4) The Commissioner shall register under this

article any person who in his opinion is liable to apply for

such registration in terms of sub-articles (1), (3) or (3a) or

who submits an application for registration when he is so

entitled in terms of sub-article (2).";

(c) immediately after sub-article (8) thereof there shall

be added the following new sub-article

"(8a) A person registered under this article in the

circumstances mentioned in sub-article (3a) may apply for

the cancellation of his registration at any time if he no

longer supplies services for which the recipient is liable to

pay VAT.";

(d) sub-article (9) thereof shall be substituted by the

following new sub-article

"(9) The value of intra-Community acquisitions for

the purpose of this article shall be determined in

accordance with Part Three of the Third Schedule.";

(e) paragraph (b) of sub-article (10) thereof shall be

substituted by the following new paragraph

"(b) if such person is entitled to have his registration

under this article cancelled and applies for such a

cancellation in accordance with sub-article (6) or (7) or (8)

or (8a), in which case the cancellation shall take effect on

1st January of the year in which the application is made.".

9. Article 13 of the principal Act shall be substituted by the

following new article

"13. (1) An application for registration or for the

cancellation of a registration in accordance with this Part

shall be submitted electronically through the established

web portal designated by the Commissioner for this

purpose and shall contain the information requested

therein.

(2) The Commissioner shall allocate a registration

number to every person registered under articles 10, 11,

11A or 12 and shall make, through the established web

portal designated by the Commissioner for this purpose,

electronically available a registration certificate to every

such person containing the registration number, the

article under which the registration was made, the

effective date of the registration and such other

particulars as the Commissioner may deem appropriate.

The Commissioner may change the registration number

of any person as he may consider necessary and shall

notify the said person of any such change.

(3) A registration number allocated under articles 10

or 12 shall have the prefix "MT" in accordance with ISO

International Standard 3166 - alpha 2. A registration

number allocated under article 11 shall not have such a

prefix and shall not be treated for any purposes of this

Act as a value added tax identification number.

(4) A registration number allocated under article

11A shall be the same registration number as that

allocated to the person under article 10 or 11 in

accordance with sub-article (3) but with the suffix "EX"

added to it.

(5) When the registration of a person under articles

10, 11, 11A or 12 is cancelled, the Commissioner shall

serve a notice on such person indicating the effective date

of the cancellation.

(6) The cancellation of the registration of a person

shall not relieve that person from any liability incurred in

accordance with this Act by virtue of anything done

before the date of the cancellation or from the obligation

to submit an application for a fresh registration in any of

the circumstances under which he is required to apply for

registration in terms of any provision of this Part.

(7) A number of persons regarded as a single taxable

person in terms of article 5(6) shall be registered as one

(1) person.

(8) The Minister may by regulations exempt any

person or class of persons from any of the provisions of

this Part and may by such regulations make such an

exemption subject to such conditions and limitations as

may be prescribed.

(9) Any person registered under articles 10, 11, 11A

or 12 shall, within fifteen (15) days from the occurrence

of any of the following events, inform the Commissioner

of such event electronically through the established web

portal designated by the said Commissioner for this

purpose and including any information requested therein

(a) in cases where there is a change in

circumstances that affects the particulars declared

in the application for his registration under articles

10, 11, 11A or 12 or otherwise furnished to the

Commissioner in connection with his registration or

appearing in the registration certificate;

(b) in cases where there is the cessation or

transfer of his economic activity or part thereof; or

(c) such other event as may be prescribed

by the Commissioner.".

10. Article 17 of the principal Act shall be substituted by the Substitution of

following new article

"17. (1) The Commissioner shall allocate a tax

period to every person registered under articles 10, 11,

11A and 12.

(2) Except as otherwise provided in this article, a tax

period means a period of three (3) calendar months

commencing on the first day immediately following the

end of the preceding tax period.

(3) The Minister may by regulations prescribe in

respect of such class or classes of persons as may be

specified in the said regulations a tax period of either

more or less than three (3) months.

(4) The first tax period of a person registered under

articles 10 or 12 shall commence on the date that such

person is registered in accordance with the said articles,

and end on such date as may be determined by the

Commissioner

Provided that such a period shall not exceed one

(1) year.

(5) When, during a tax period of a person, his

registration under articles 10 or 12 is cancelled, such

period shall end on the last day of the month in which that

cancellation is made and shall be the last tax period of the

said person, saving the allocation of a new tax period to

that person should he be subsequently registered again

under the said articles 10 or 12.

(6) The Commissioner may by means of a notice

served on a person registered under articles 10 or 12 in

any particular case vary any tax period for such person in

such manner as may be specified in the said notice.

(7) Notwithstanding the other provisions of this

article, the relevant provisions relating to the tax periods

of a person registered under articles 11 and 11A to the

extent provided in the Sixth Schedule shall apply to

persons registered under those articles.".

11. Sub-article (2) of article 27 of the principal Act shall be

substituted by the following new sub-article

"(2) Every person whose registration under article 10 is

cancelled shall provide the Commissioner with a tax return

relating to the last tax period within thirty (30) days from the

date on which he is served with a notice referred to in article

13(5) or within such longer period as may be specified in the said

notice

Provided that this sub-article shall not apply when

the registration under article 10 is cancelled in the circumstances

mentioned in article 11(3).".

Article 30 of the principal Act shall be substituted by the

following new article

"30. (1) Every person registered under articles 11

and 11A shall furnish the Commissioner with the

periodical declarations relating to his economic activity

by such means and at such intervals as may be specified

in the Sixth Schedule.

(2) Every taxable person registered under article 10

shall submit a recapitulative statement electronically

through the established web portal designated by the

C o m m i s s i on e r f o r t hi s pu r p o s e a n d i n c l u d e a n y

information requested therein at such intervals as the

Minister may by regulations prescribe for the following

supplies

(a) intra-Community supplies of goods

exempt in accordance with items 3(1) and 3(4) of

Part One of the Fifth Schedule;

(b) the supply of goods which were

supplied to him by way of intra-Community

acquisition of goods which satisfy the conditions

referred to in item 2(2) of Part Three of the Third

Schedule;

(c) services, other than services that are

exempted from VAT in the Member State where the

transaction is taxable, and for which the recipient is

liable to pay the tax made to taxable persons and

non-taxable legal persons identified for purposes of

value added tax.

(3) Every taxable person and non-taxable legal

person shall make such statements and shall produce such

information and documents as may be reasonably

required by the Commissioner for any purpose of this Act

or as may be prescribed.".

Immediately after article 30 of the principal Act, as Addition of new

substituted, there shall be added the following new article

A person registered under article 12 shall furnish

the Commissioner with a notice of payment in terms of

article 21(5) and declarations of his intra-community

acquisitions and purchases made for which the customer

12. is liable for the payment of the tax pursuant to articles

20(2)(b) and 20(2)(c) on such form as the Minister may be

regulations prescribe. The provisions of article 27(4) with

respect to tax returns shall apply mutatis mutandis to the

delivery of the said form.".

14. Paragraph (a) of sub-article (2) of article 38 of the principal Amendment of

Act shall be substituted by the following new paragraph

"(a) being required to furnish a declaration in terms of

article 30(1) or article 30A, does not furnish such declaration

within the time stipulated in the relevant provisions of this Act

shall be liable to an administrative penalty of ten euro (€10) for

every month or part thereof that elapses from the date by which

the declaration should have been furnished in accordance with

this Act and the date when it is actually furnished to the

Commissioner

Provided that such administrative penalty shall in no

case exceed one hundred and twenty euro (€120) for each such

declaration; and".

15. Sub-article (3) of article 39 of the principal Act shall be

substituted by the following new sub-article

"(3) Any person who, being required to give notice or

provide information under articles 13 or 15, does not give that

notice or information within the time stipulated in the relevant

provisions of this Act shall be liable to an administrative penalty

of twenty euro (€20) for every month or part thereof that elapses

from the date on which the notice or information should have

been given in accordance with those articles and the date when

such notice or information is given to the Commissioner

Provided that such administrative penalty shall in no

case exceed two hundred and fifty euro (€250) for each such

notice or information.".

16. Article 51 of the principal Act shall be substituted by the

following new article

"51. (1) Any person who makes any supply, other than a

supply in respect of which a tax invoice is required to be issued

in terms of article 50, shall provide to the person to whom the

supply is made an invoice, receipt or other document which shall

be issued in the form and in the manner and shall contain the

details indicated in the Thirteenth Schedule.

(2) The provisions of sub-article (1) shall not apply to

supplies which are exempt without credit in accordance with Part

Two of the Fifth Schedule other than supplies referred to under

sub-item 16(1) of Part Two of the said Schedule.".

17. In sub-article (5) of article 56 of the principal Act the words

"Council Regulation (EU) No. 904/2010 of 7 October 2010 on

administrative cooperation and combating fraud in the field of value

added tax or of any such other Council Regulation as may be

prescribed" shall be substituted by the words "Council Regulation

(EU) No. 904/2010 or of any such other Council Regulation as may be

prescribed".

18. Paragraphs (h) to (k) of article 77 of the principal Act shall be

substituted by the following new paragraphs

"(h) applies to be registered under articles 11 or 11A in

circumstances indicating that he knows or could with due

diligence have known that he is not entitled to be so classified;

(i) being registered under articles 11 or 11A and not

being eligible to remain so registered does not apply for the

cancellation of such registration in the manner required and

within the time stipulated in this Act;

(j) being registered under articles 11 or 11A purports in

connection with any transaction not to be so registered for the

purpose of obtaining any financial gain;

(k) not being registered under articles 11, 11A or 11B

purports in connection with any transaction to be so registered for

the purpose of obtaining any financial gain;".

Passed by the House of Representatives at Sitting No. 294 of the

10th December, 2024.

ANĠLU FARRUGIA

Speaker

ELEANOR SCERRI

Clerk of the House of Representatives

€1.62