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Malta implements VAT Grouping

Dated: [bxcode.pagedata.date]

Member States were granted an option for introducing a VAT grouping regime that allows legally independent persons to be treated as one single taxable person under certain conditions. The main consequence of VAT grouping is that it leads to out-of-scope intra-group transactions, enabling companies to outsource functions without running the risk of non-deductible VAT.

VAT Grouping in Malta has been implemented on the 22nd May 2018 by virtue of LN 162 of 2018 entitled - Value Added Tax (Registration as a Single Taxable Person Regulations, 2018.

Two or more persons established in Malta may apply to the Commissioner to be registered as a single taxable person for VAT purposes, if the following conditions are satisfied:


  1. at least one of the applicants is a taxable person who is licensed or recognised by the Malta Financial Services Authority;
  2. each of the applicants is bound to each of the others by financial links, organisational links and economic links; and
  3. at the time of application, all the applicants have submitted all VAT returns and Income Tax filings and have no pending tax due.


For the purposes of this regulation the required financial links shall be deemed to exist where any two or more of the following are, directly or indirectly, held as to more than 90% by the same person or persons (whether a legal person or an individual):


(ii) the entitlement to profits available for distribution; or

(iii) the entitlement to surplus assets available for distribution on a winding up or equivalent event;

Moreover, organisational links shall be deemed to exist where the applicants have a shared management structure, whether in whole or in part; whilst the required economic links shall be deemed to exist where

  • the activity of each of the applicants is of the same nature or within the same industry, or 
  • where the activities of the applicants are interdependent or complementary, or
  • where one member of the VAT group carries out activities which are wholly or substantially to the benefit of any one or more of the other members.


It is to be noted that no person may be a member of more than one VAT Group at the same time.

Persons bound to each other by financial links, organisational links and economic links may only form part of the same VAT Group.


The members of a VAT Group shall nominate from amongst themselves the Group Reporting Entity, which shall exercise any and all rights and discharge any and all obligations arising to the VAT Group. Each member of a VAT Group shall be jointly and severally liable for the payment of any VAT due including any interest or penalties. The VAT group, will be assigned a single VAT identification number, whilst the other individual members VAT identification number will be deactivated.


Once the Commissioner communicates the effective date of the VAT identification of the VAT Group, then any supply made by a member of a VAT Group shall be treated, for VAT purposes, as a supply made by the Group Reporting Entity.


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