Malta: VAT in the Digital Age (ViDA) and E-Invoicing Requirements
The Budget Implementation Act which was published recently, included the necessary amendments in the VAT Act required to transpose the new provisions of the VAT Directive related to VAT and the Digital Age (VIDA), which will enter into force on the 1 January 2027.
Malta has not yet implemented the mandatory requirement for businesses to produce an electronic invoice as well as for digital reporting. However, according to the new VIDA provisions in the VAT Directive, such measures would become mandatory for cross-border trading as from 1 July 2030.
The following is a summary of the ten new VIDA measures which will come into force in all EU member states, including Malta, from 1 January 2027 and the corresponding transposed provisions in the Maltese VAT Act:
1. Extension of the deemed supplier provision for platforms where non-EU established persons supply goods to taxable and non-taxable legal persons whose Intra-community acquisitions are exempt under article 3(1) of the VAT Directive; to persons applying the flat rate farmer's scheme; to Small Enterprises using the SE exemption Scheme and to taxable persons making exempt supplies.
This has been transposed in sub-item (2) of item 12A of the Second Schedule to the VAT Act.
2. Phasing out of the call-off stock arrangements until the 30 June 2029 only regarding call-off stock that is in place before 30 June 2028.
This has been transposed in sub-item (2) and a new sub-item (8) of item 17A of the Second Schedule to the VAT Act).
3. Cash Accounting shall not be used for the One-stop-shop schemes.
This has been transposed in sub-item (2) of item 2 of Part One of the Fourteenth Schedule.
4. For supplies made under the Non-Union and the Union OSS schemes the general rules for the chargeable event shall always apply (i.e. when goods are delivered or when services are performed, etc).
This is a consequence of the preceding measure no 3.
5. Member States shall be allowed to require the appointment of a tax representative for refunds under the 13th Directive for persons who are registered under the OSS. However, they cannot apply reciprocity on non-EU traders using Union OSS and cannot exclude certain expenses or impose additional conditions.
This has been transposed in item 11 of Section 2, item 10 of Section 3 and item 13 of Section 4 of Part Seven of the Fourteenth Schedule.
6. The Import One-Stop-Shop (IOSS) shall not be used by those using the exemption Scheme for Small Enterprises (SE’s) and vice-versa. Additional security to be introduced for unique transactions in the IOSS.
This has been transposed in sub-item (3) of item 3 of Section 4 of Part Seven of the Fourteenth Schedule to the VAT Act.
7. Natural gas, electricity, heat or cooling through networks shall be deemed to be Intra-Community distance sales of goods until 1 Jan 2028 and may therefore be reported in the Union OSS Scheme.
This has been transposed in sub-item (2) of item 2 of Section 2 of Part Seven of the Fourteenth Schedule to the VAT Act.
8. The €10,000 annual threshold of distance sales of goods shall only include intra-community distance sales of goods that are supplied from the Member State where the taxable person is established.
This has been transposed in sub-item (5) of item 4 of Part One of the Third Schedule to the VAT Act.
9. The registration for the OSS will automatically change the place of supply of those supplies made by persons who do not exceed the €10,000 threshold, to the place of the customer.
This has been transposed in sub-item (5) of item 4 of Part One of the Third Schedule.
10. To register under the non-Union OSS scheme, it will no longer be mandatory to provide the website address.
This has been transposed in paragraph (c) of sub-item (1) of item 4 of Section 2 and item 6 of Section 4 of Part Seven of the Fourteenth Schedule.
As already stated above these provisions will become applicable as from 1 January 2027.
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