Regulations, 2024

L.N. 350 of 2024

VALUE ADDED TAX ACT

(CAP. 406)

Value Added Tax Act (Amendment of Fourteenth Schedule)

Regulations, 2024

IN EXERCISE of the powers conferred by article 75 of the Value

Added Tax Act, the Minister responsible for finance, has made the

following regulations:-

(1) The title of these regulations is the Value Added Tax

Act (Amendment of Fourteenth Schedule) Regulations, 2024 and these

commencement.

regulations shall be read and construed as one with the Fourteenth

Schedule to the Value Added Tax Act, hereinafter referred to as the

"Fourteenth Schedule".

(2) These regulations transpose the provisions of Council

Directive (EU) 2020/285 of 18 February 2020 amending Directive

2006/112/EC on the common system of value added tax as regards the

special scheme for small enterprises and Regulation (EU) No 904/

2010 as regards the administrative cooperation and exchange of

information for the purpose of monitoring the correct application of

the special scheme for small enterprises, as well as introduce technical

improvements to the existing provisions contained in the Fourteenth

Schedule.

(3)

These regulations shall come into force on 1st January

2025.

The Fourteenth Schedule shall be amended as follows

(a) Part One thereof shall be substituted by the following

new part

"Part One

Cash Accounting

Interpretation

1. In this Part

"qualifying supplies" means

(a) services performed by a person holding a

warrant issued under any law in force in Malta to

practise a profession acting in an independent

capacity in the exercise of such profession;

(b) services performed by a group of persons

holding a warrant issued under any law in force in

Malta to practise a profession whether associated in

a partnership or otherwise, but excluding a

company;

(c) services performed by a company, which

if performed by a physical person would require a

warrant issued under any law in force in Malta to

perform such services in the exercise of a

profession, and which is registered in accordance

with any law in force in Malta to practice such

profession;

(d) services performed by an arbitrator

pursuant to a submission for arbitration made in

conformity with the Arbitration Act;

(e) services performed by a judicial referee,

or an expert appointed by a court or a tribunal set up

by law;

(f) services performed by civil, mechanical

and electrical engineering contractors in their

professional capacity; and

(g) supplies made by retailers.

Cash accounting option

2. (1) Subject to the other provisions of this

Part, a taxable person registered under article 10 who

carries out qualifying supplies and whose annual turnover,

calculated in accordance with item 3 of the Definitions in

the Sixth Schedule, does not exceed €2,000,000,

excluding tax, may opt for such tax to become chargeable

on the earlier of

(a) the date when a tax invoice or fiscal

receipt, as the case may be, is issued for the supply,

to the extent covered by such tax invoice or fiscal

receipt; or

(b) the date when a payment is made for

such supply, to the extent covered by that payment

Provided that the right of deduction of input

tax of such person shall be postponed until the tax on any

goods or services supplied to him has been paid to his

supplier.

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

to supplies of services in respect of which the tax is

payable by the customer and to supplies or transfers of

goods referred to in item 4 of the Fourth Schedule.

Invoices and receipts for qualifying supplies

(1) Where a tax invoice is required to be

issued for a qualifying supply made in terms of item 2, it

shall be issued by not later than the fifteenth (15) day of

the month following the month in which the payment for

the said supply is made, to the extent covered by such

payment.

(2) Where a fiscal receipt is required to be issued

for a qualifying supply made in terms of item 2, unless it

has been issued before the payment has been made, it

shall be issued and delivered to the person who effects the

payment or to whom the supply is made, immediately

after payment has been effected, to the extent covered by

such payment.

Transfers of debts arising from supplies subject to cash

accounting

Notwithstanding the other provisions of this

Part, where a person transfers any debts owed to him

arising as a result of a supply made in terms of item 2, the

tax on such a supply shall become chargeable on the date

of such transfer.

Cancellation of a registration under article 10

Notwithstanding the other provisions of this

Part, where the registration of a person registered under

article 10 is, for any reason cancelled, the tax on a supply

made in terms of item 2 shall become chargeable, at the

latest, on the last day of his last tax period.";

(b)

Part Two thereof shall be amended as follows

(i) item 3(b) thereof shall be substituted by the

following new sub-item

"(b) by another taxable person not being a

taxable person covered by the exemption for small

enterprises provided for in Article 284 of Council

Directive 2006/112/EC, in so far as the supply of

goods by such other person is an exempt without

credit supply;";

(ii) item 3(c) thereof shall be substituted by the

following new sub-item

"(c) by another taxable person, in so far as the

supply of goods by such other taxable person is

covered by the exemption for small enterprises

provided for in Article 284 of Council Directive

2006/112/EC and involves capital goods."; and

(iii) item 5 thereof shall be substituted by the

following new item

"5. (1) Second-hand goods dealers shall have

the option to apply the provisions of this Part, after having

obtained the approval of the Commissioner in writing, in

respect of supplies of

(a) works of art supplied to them by their

creators or their successors in title; and

(b) works of art supplied to them by a

taxable person other than a taxable dealer.

(2) Where a second-hand goods dealer exercises

the option available under sub-item (1), such option shall

cover, a minimum of, two (2) calendar years.

(3) Where a second-hand goods dealer exercises

the option available under sub-item (1), the taxable value

shall be determined in accordance with item 4 of this

Part.";

(iv) item 11(1)(c) thereof shall be substituted by the

following new paragraph

"(c) another taxable person, in so far as the

supply of goods, carried out by such taxable person in

accordance with a contract under which commission

is payable on sale, is covered by the exemption for

small enterprises provided for in Article 284 of

Council Directive 2006/112/EC and involves capital

goods; or";

(c) Part Three thereof shall be substituted by the

following new Part

"Part Three

Professional Services

Definition of professional services

1. For the purpose of this Part, "professional

services" shall mean the qualifying services referred to in

Part One of this Schedule."

Date when certain services are performed

2. When, for any purpose of this Act, it is

necessary to determine the date when professional

services referred to in this Part are performed, the

following provisions shall apply

(a) the services of an advocate or of a legal

procurator in assisting any party to judicial

proceedings shall be treated as performed on the

date when a final decree or judgment in those

proceedings is delivered by the court in which the

proceedings have been instituted, or, when the

advocate or legal procurator abandons or is

abandoned by his client at an earlier date, on such

earlier date

Provided that services relating to

proceedings instituted in different courts are to be

treated as supplied separately;

(b) the services of a judicial referee or of an

expert appointed by a court or a tribunal set up by

law shall be treated as performed on the date on

which the report is filed or made to the court or

tribunal or, when the appointment is terminated on

an earlier date, on such earlier date; and

(c) the services of an arbitrator shall be

treated as performed on the date of the award or,

when the appointment is terminated on an earlier

date, on such earlier date.

Tax on certain professional services where tariffs of fees are

established by law

3. (1) The tax chargeable on a supply of

professional services shall be an amount over and above

the amount resulting to be chargeable for those services in

terms of any tariff of fees established under any law in

force in Malta.

(2) Nothing in this item shall be construed as

requiring any person required by law to assess or declare

the fees payable in accordance with any such tariff to

declare or assess also the said tax.

(3) In any action for the enforcement of the

executive title referred to in article 253(c) of the Code of

Organization and Civil Procedure, the amount for which

payment may be enforced shall be the amount indicated in

the taxed bill of costs concerned increased by any tax

chargeable on the supply of professional services to

which the taxed bill of costs refers as evidenced by a tax

invoice or a fiscal receipt or a certified copy thereof

attached to the said bill.

(4) The provisions of sub-item (3) shall be

without prejudice to the right of the debtor to request the

delivery of the original tax invoice or the fiscal receipt in

accordance with item 4 of this Part.

Tax claimed from third parties

4. The provisions of this item shall apply with

respect to any action for the payment of fees for

professional services brought against any person other

than the person to whom the services were supplied

(a) the person against whom the action is

brought shall not be bound to pay the amount

relating to the tax, if any, chargeable on the supply

of the said services unless the original tax invoice or

fiscal receipt for those services complying with the

provisions of paragraph (b) is delivered to him or,

where the action is brought against a number of

persons jointly, to any one of them;

(b) a tax invoice delivered as aforesaid shall,

in addition to the information required by this Act,

contain

(i) the following declaration signed

by the person to whom the said services were

rendered

"I declare that no credit for input

tax has been or shall be claimed by me in

respect of the professional services

referred to in this tax invoice;

(ii) where the person against whom the

action or claim is brought is a person

registered under article 10 or, where the action

is brought against a number of persons jointly,

when any one of them is a person registered

under article 10, the name and value added tax

identification number of the said registered

person; and

(c) when a tax invoice or fiscal receipt for

fees for professional services, complying with the

provisions of paragraph (b) if applicable, is

delivered to a taxable person who is bound at law to

pay or reimburse the said fees it shall for the

purposes of this Act be deemed as if it were a tax

invoice for professional services supplied to him.";

and

(d)

Part Five thereof shall be amended as follows

(i) item 1 thereof shall be substituted by the

following new item

"1. Where, in any particular contract of

supply, and in order to secure the regular payment of

the tax in terms of this Act, the Commissioner may,

by notice in writing to the parties to the contract

direct that the payment of the tax on a taxable supply

made to a person established in Malta and registered

under articles 10 or 12 shall be a liability of the

person to whom the supply is made."; and

(ii) item 3 thereof shall be substituted by the

following new item

"3. When a direction has been given by the

Commissioner in terms of item 1 of this Part, the tax

invoice which is required to be issued in terms of this

Act by the person who makes the supply shall,

instead of the information required by item 3(i) of the

Twelfth Schedule, indicate the words "Direction for

customer to self-charge VAT in terms of Part Five of

the Fourteenth Schedule to the VAT Act.".

€0.72