Malta VAT on electronically supplied services: what changed on 1 October 2026

01What counts as an electronically supplied service in Malta?

MTCA's guidance applies three conditions, taken from Article 7 of EU Implementing Regulation 282/2011. The service is delivered over the internet or an electronic network. Its nature makes the supply essentially automated, with minimal human intervention. And it could not be supplied at all without information technology. All three must be met.

Selling online is not the test. How the service is delivered is. MTCA lists goods ordered online, and traditional services booked online such as accommodation or car hire, as outside the category. Professional advice sent by email is outside it too: the email is only the channel. The VAT Act says the same: communicating by email does not of itself make a service electronically supplied.

The guidance interprets one rule: the place of supply of electronically supplied services to consumers, in Item 10 of Part Two of the Third Schedule to the VAT Act. Both of MTCA's lists are non-exhaustive, and the exclusions apply to services supplied on their own. Examples include software access, website hosting and e-books on the qualifying list, and live webinars, tutor-supported recorded courses and advice by email among the exclusions.

02What changed on 1 October 2026, and what did not?

The definition did not change. MTCA's 2015 guidance used the same three conditions. The revised guidance was last updated on 7 April 2026, applies from 1 October 2026 and replaces earlier guidance on the same matter from that date.

Three things are new. There is now a list of 27 services that qualify, many of which mirror the EU implementing regulation. Automated betting has moved across: the 2015 exclusions covered betting on live horse races and other live sporting events, while the new list includes automated betting on any event, live or otherwise. And fully automated casino-type games and system-run bingo are now named.

For a SaaS, digital-content or e-learning business, the change is clarity rather than a new test. The useful step is to check that each product description still matches how the product works today, particularly where onboarding, consulting, support or tutoring has been added since the description was written.

03Why does the classification matter for VAT?

Under the rule MTCA interprets, an electronically supplied service to a consumer is supplied where the consumer is established, has a permanent address or usually resides. So a Malta business selling an app subscription directly to a consumer in Germany starts from German VAT, not Maltese, unless the threshold below applies. Sales through an app store or marketplace may be treated as supplied by the platform: Article 9a of Regulation 282/2011 presumes this unless the provider is explicitly named as the supplier and the contracts reflect it.

The VAT Act sets a EUR 10,000 threshold for these sales (Third Schedule, Part Two, item 10(2) to (4)), and the European Commission describes the same EU rule. It is available only to a supplier established in one Member State. The total counts cross-border consumer sales of telecommunications, broadcasting and electronic services; since 1 July 2021 it also counts intra-EU distance sales of goods. While that total stays within EUR 10,000 in the current calendar year and did so in the preceding one, the place of supply stays in the supplier's Member State. Once it is exceeded during a year, the customer's rules apply from that point. A supplier below the threshold can opt for the customer's rules instead, and that choice covers two calendar years. The Commission describes its One Stop Shop schemes as a reporting route for these sales; EU-established suppliers can use the Union scheme.

Three limits matter. The rule covers supplies to non-taxable persons, so sales to businesses are outside it and need their own analysis. Classification does not decide exemption: education and gambling have their own exemption provisions in the Fifth Schedule, which are separate questions. Nor does it decide the rate. Where the supply takes place in Malta, the standard rate is 18% (VAT Act, article 19(1)); the Eighth Schedule sets reduced rates for some supplies, including 5% for books and similar printed matter supplied electronically.

• Is each customer a consumer or a business, and what evidence shows it?
• Where does each consumer live, and do your records agree with each other?
• Is the business established in more than one Member State?
• What were cross-border consumer sales across the EU this year and last year?
• Does any product raise a separate exemption question?

04Are online courses electronically supplied services?

It depends on how the course is delivered. MTCA lists a live interactive course, such as a webinar, and a pre-recorded course with live support from a tutor, as outside the category when supplied on their own. The EU implementing regulation lists automated distance teaching that needs limited or no human intervention, and workbooks marked automatically, as inside it.

Live teaching streamed to consumers can engage a different rule. MTCA's guidance of 7 April 2026 on streamed and virtual activities says that educational and similar activities streamed or made virtually available to a consumer are supplied where the consumer lives, under the proviso to Item 6(2)(a). Where an activity is organised for in-person attendance, the place where it actually takes place governs.

Exemption is another question again, and it turns on the provider as well as the course. Item 12 of the Fifth Schedule to the VAT Act, in the version published on 1 October 2026, exempts the kinds of provision listed below. MTCA's 2016 guidance on educational services quotes an older, narrower item 12(1), without vocational training or Minister-recognised establishments, so work from the Act.

• Education or educational research, vocational training or retraining, including distance learning, by a government school or institution, the University of Malta, a school or institution registered under the Education Act, or an establishment recognised by the Commissioner or by the Minister responsible for education.
• Education of a kind provided by a school or university, including distance learning, or religious instruction, by a non-profit institution recognised by the Commissioner.
• Private tuition by independent teachers in subjects normally taught at school or university, excluding recreational, physical or sporting activities.
• Training in the arts by an organisation accredited by the Register for the Accreditation in the Training of the Arts.

05What changed for gambling and betting VAT on 1 October 2026?

Legal Notice 86 of 2026, published in the Government Gazette on 1 April 2026 and in force from 1 October 2026, replaced item 9 of Part Two of the Fifth Schedule to the VAT Act. The exemption without credit now covers 'betting, lotteries and other forms of gambling, as may be approved by the Minister'.

MTCA's guideline dated 6 April 2026, which applies from 1 October 2026, notifies which forms the Minister has approved for this exemption. There are three: low-risk games as defined in the Gaming Authorisations Regulations (S.L. 583.05); junket events that must be approved under those regulations, held on an occasional basis; and facilities for gambling on the outcome of a real-life sporting event or competition that can only be accessed physically where the event takes place, including bookmakers and betting exchanges there.

Whether a particular product matches one of those forms is a question for your adviser. If a gambling supply is taxable, the place-of-supply rules decide where it is taxed, and that is where the ESS list matters. Automated betting, fully automated casino-type games and system-run bingo are listed as electronically supplied. Live casino with a physical dealer, streamed from a studio or casino, is not; MTCA's streamed-activities guidance treats it as an activity similar to entertainment under Item 6(2)(a).

MTCA's transitional guideline of 30 September 2026 includes an example of a gaming company whose sports betting was exempt until 30 September 2026 and becomes taxable when taking place in Malta from 1 October 2026. The same company's online casino services were already taxable when taking place in Malta. Review each product separately. Do not extend a conclusion about one product to a whole group, or assume that a gaming licence settles the VAT result.

• Product name, how participation works and whether the process is automated.
• Whether staff can intervene, and whether play is streamed from a studio or casino.
• Whether the product matches one of the three approved forms.
• Who the players are and where they are located.
• Costs, contracts and capital goods shared between products.

06How are contracts that straddle 1 October 2026 handled?

MTCA's transitional guideline covers supplies whose treatment moves from exempt without credit to taxable because the VAT Act changed. The chargeability rules in the Fourth Schedule still decide which return period the VAT falls in. The treatment applied follows when the service was actually performed.

For continuous supplies invoiced across the transition date, the guideline splits the consideration into the part performed before the date and the part performed on or after it. Unless the agreement specifies otherwise, and provided this reasonably reflects the economic reality of the supply, the guideline allows you to assume even delivery over the invoiced period. Where an invoice already showed exempt treatment, the guideline's example requires a corrective invoice.

Input VAT is affected too. Costs used wholly for exempt supplies before the transition stay non-deductible. Costs that serve both periods go through the partial attribution method in item 6 of the Tenth Schedule, with a provisional ratio and a later adjustment. Capital goods may need annual adjustments. Each of these needs figures from the books, not just the contract.

07What should you give your adviser before changing invoices?

Build one row per offering. Record its description, delivery steps, human involvement, customer types, location evidence, contract version, an ordinary invoice and an exception such as a refund or credit note. Link each row to the source records. Keep customer data under authorised access rather than pasting it into public tools.

Ask for a written conclusion per offering: the facts considered, the guidance relied on and the actions that follow. Agree who updates invoice templates, VAT codes and return or One Stop Shop workflows. If earlier periods need review, scope that work explicitly instead of quietly changing historic entries.

The checklist below builds the brief. It records what you say is organised; it does not classify anything. Revisit it when you add a product, change support arrangements or change your contractual role on a platform.

• Describe each offering and its contracting supplier.
• Trace delivery and every point of human involvement.
• Separate consumer and business sales, with location evidence.
• List exemption and transition questions on their own lines.
• Assign each open question to a person who can answer it.