Upcoming enhancements to Malta’s VAT treatment of gambling and betting activities

On 31st March 2026, Legal Notice 86 of 2026 introduced significant amendments to the VAT regime applicable to gambling and betting activities in Malta, specifically revising the VAT exemption under Item 9 of Part Two of the Fifth Schedule to the Value Added Tax Act (Cap.406). Furthermore, on the 6th April 2026, the publication of new guidelines issued by the Commissioner for Tax and Customs provide detailed clarification on updated exemption.

Collectively, these measures represent a major change of the fiscal and compliance landscape for gaming operators.

Overview of legislative changes

Under the previous framework, the VAT exemption applicable to gambling was relatively broad in scope. The revised wording significantly narrows this exemption, limiting it to betting, lotteries, and other forms of gambling, as may be approved by the Minister. This change is intended to align Malta’s rules more closely with Article 135(1)(i) of the EU VAT Directive, ensuring greater clarity and harmonisation with European VAT principles.

Clarification of exempt activities

The newly issued MTCA guidelines provide precise definitions of the activities that will continue to qualify for exemption without credit. These are now restricted to:

1. Low-risk games, as defined in the Fifth Schedule to the Gaming Authorisations Regulations (Subsidiary Legislation 583.05).

2. Junket events required to be approved in accordance with the Gaming Authorisations Regulations (SL583.05) held on an occasional basis. Junket events shall be considered as being held on an occasional basis where they are not organised on a routine basis and which, due to their scale and nature, require specific planning and organisational arrangements

3. The provision of any facilities for gambling on the outcome of a real-life event, which facilities can only be physically accessed at the place where the event physically takes place, including the services of book makers, betting exchanges and any equivalent facilities. The term ‘event’ shall mean a sporting event or competition.

These categories define the full extent of activities eligible for exemption; all other gaming supplies fall outside the scope of the exemption.

Expected impact

By narrowing the scope of the exemption, one expects increased VAT neutrality, especially with respect to the recovery of input VAT on eligible costs. This is a meaningful shift for operators who have historically experienced VAT leakage due to the exempt status of core gambling activities.

The revised exemption may materially affect the VAT treatment of certain casino offerings, remote gaming services, and other betting activities that no longer meet the criteria for exemption. Operators will therefore need to assess whether supplies previously treated as exempt will now become taxable and consider how this will affect their input VAT recovery position.

Operational and compliance considerations

The redefinition of exempt supplies will require gaming operators to reassess key elements of their VAT compliance arrangements. In preparation for the changes, organisations may need to:

· Update VAT accounting systems and reporting models,

· Review and potentially redesign contractual arrangements with intermediaries and service providers,

· Consider adjustments to pricing structures and invoicing practices,

· Reassess cross-border service flows and corresponding VAT treatment.

Where the narrowing of the exemption leads to increased entitlement to input VAT recovery, operators should also evaluate the need for partial attribution adjustments and determine any transitional impacts on their VAT recovery calculations.

Effective date and next steps

All changes outlined in the legislation and accompanying guidelines will take effect from 1st October 2026.

Operators are strongly advised to assess the implications without delay in order to ensure operational readiness and a smooth transition to the new regime. Early preparation will be essential in mitigating risks and leveraging potential VAT recovery enhancements.

How can Forvis Mazars help?

Our indirect tax specialists can support operators in:

• assessing the impact of the new VAT rules on existing and future gaming offerings;

• reviewing VAT recovery positions and compliance obligations;

If you’d like to discuss how these changes may affect your business, feel free to reach out.