Article 10 VAT Registration
Any company that registers for VAT under Article 10 gets a VAT number that has an MT prefix. If you register under article 10, you will need to:
- Issue tax invoices on every supply you make
- Submit your VAT returns for three months levy period not later than 6 weeks after the tax period expires or as the commissioner directs.
Once a taxable person makes a supply for a consideration in Malta (other than an exempt without credit supply), the taxable person shall apply to be registered under this article within 30 days from the date of that supply. In other words, you should register for VAT within 30 days of carrying out your first sale. However, it is advisable to register before.
If you are supplying goods and services and your annual turnover exceeds the established entry threshold, you have to register for VAT under article 10, by which you will be liable to charge VAT on your taxable supplies and you could claim back the VAT you incur in the course of your taxable activity under certain conditions. For those whose turnover does not surpass the stipulated entry threshold, they may register for VAT as exempt under article 11.
Article 11 VAT Registration
When a taxable person registers for VAT under article 11, he does not charge VAT on his supplies. Also, it will not be possible to claim back the VAT that you incur while undertaking your economic activity.
Registering under this article depends on the entry and exit threshold. A taxable person whose annual turnover does not exceed the entry threshold as per the table below may opt to register under article 11 of the VAT act. The entry threshold is the amount of turnover per annum under which a taxable person could opt to register as an exempt person under article 11.
Selecting which threshold to apply depends on the type of goods and services you are supplying. i.e. either services with high value added (e.g services of an accountant or a lawyer) or services with low value added. The latter are services where the value of that service includes goods which are incorporated in the value of that service (e.g. an electrician or catering service).
The exit threshold threshold is applied in the case where a person who is registered under article 10 would change his registration to article 11.
Entry and Exit Thresholds
Economic activity consisting mainly of supplies of goods: Entry Threshold €35,000 / Exit Threshold €28,000
Economic activity consisting mainly of supplies of services with low value added: Entry Threshold €24,000 / Exit Threshold €19,000
Other economic activities: Entry Threshold €20,000 / Exit Threshold €17,000
Article 12 VAT Registration
Those who acquire intra-community goods while in Malta with a Value of more than €10,000 for the whole year should register for VAT under article 12. They are also required to pay VAT every time they acquire such intra-community goods.
If you are registered under article 11 as an exempt taxable person and you intend to make Intra-Community acquisitions and pay VAT thereon in Malta, then you need to register also under article 12 to obtain a valid identification number for this purpose and qualify for such an arrangement.
VAT Submissions and Deadlines
Taxable persons registered under Article 10
Taxable persons registered under article 10 must submit their VAT returns within 6 weeks following the end of each VAT quarter. The VAT period typically allocated to a person registered under article 10 would be a period of 3 calendar months.
A 12 month VAT period applies where the value of sales made does not exceed the relevant 'Exit Threshold'
Taxable persons registered under Article 11
Taxable persons registered under article 11 must submit their VAT declarations on a yearly basis by the 15th March and 15th February respectively following the end of the calendar year.
Taxable persons registered under Article 12
Monthly notices of intra-community acquisitions of goods are to be submitted 15 days after every calendar month have elapsed in which such acquisition took place. On the other hand declarations of purchases of services for which the taxable person is liable to self-charge VAT in Malta are to be submitted to the Commissioner for Revenue by no later than 1 month and 15 days from the end of the month in which the service is received.
On a yearly basis a declaration has also to be submitted including the amount of goods and services received through intra-community acquisitions for the whole year.
VAT Recapitulative Statements
Taxable persons registered under Article 10 may also be required to periodically (monthly / quarterly) submit statements summarising the intra-community sales directly to the European Union's VAT Information Exchange System (VIES). These statements are applicable when a taxable person supplies goods or services to taxable persons in the EU with a valid VAT number, with the place of supply being where the customer is established. If this statement is required to be submitted in a particular quarter, it must be done by the 15th day of the month following the relative calendar month / quarter.
