Companies, institutions or organisations established overseas which intend to hold a conference or any other event in Malta should be aware of the possible Malta Value Added Tax (VAT) implications that may arise as a result of such activity. A brief overview of the main VAT issues that may be relevant can be found below.
Malta input VAT
Overseas companies, institutions and organisations holding a conference or any other event in Malta are likely to incur Malta VAT on goods and services which are purchased for the purpose of holding such conferences or events. Typical costs on which Malta VAT will normally be charged include:
- hotels and accommodation;
- restaurant meals;
- exhibition, event and conference costs;
- marketing and promotional costs;
- telephony and internet;
- car rental/transport;
- diesel/petrol; and
- various professional fees.
The standard VAT rate in Malta is 18%. For supplies of specifically listed goods and services a reduced rate of 7% (for hotels and accommodation) and 5% (e.g. for electricity, printed matter and admission to museums, art exhibitions, concerts and theatres) applies.
VAT refunds to overseas businesses
Entities acting in a business capacity can usually recover the Malta VAT incurred. Hence, non-resident businesses that have no fixed establishment in Malta and who are not required to register for VAT in Malta may apply for a refund of any Malta VAT incurred in the course or furtherance of their economic activity, subject to the same restrictions as those applicable to the deduction of input VAT by businesses registered for VAT in Malta. Certain expenses are, in any situation, blocked (such as 'entertainment' expenses) and any input VAT incurred in relation to such purchases will not be refundable.
Refund applications must relate to a certain refund period. Any claim for repayment must also be of a certain minimum amount of Malta VAT, and must be submitted within a prescribed deadline. All claims need to be backed-up with the necessary documentation/invoices. The Maltese VAT authorities may, in certain circumstances, require the appointment of a tax representative to file a claim for a VAT refund to businesses resident outside the EU.
Registering for VAT in Malta
An organiser of a conference or any other event in Malta who charges delegates for their attendance would typically be required to charge Malta VAT on its fees and, as a result, would need to register for VAT in Malta under the standard registration.
Once registered, the organiser would be required to submit Malta VAT returns (typically on a quarterly basis) and comply with all other VAT compliance obligations related to such registration. However, having a Malta VAT registration also means that any VAT incurred on purchases within Malta in relation to the conference/event will be reclaimable through its VAT returns (subject to certain generally applicable restrictions for non-qualifying expenditure).
How can Deloitte help?
We can help you to determine how the Maltese VAT rules might affect your organisation in the following ways:
- Review individual scenarios and provide advice on whether VAT registration is required.
- Provide guidance on which purchases VAT may be recovered on.
- Review the purchase invoices to ensure they contain the correct information for VAT purposes.
- Determine the amount of VAT which is recoverable and prepare and submit the refund claim.
- Deal with the Tax Authority if required.
- Work together to establish the most cost effective solution for you to hold your conference or event in Malta.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.