Malta tax cuts in January

According to local media reports in Malta over the weekend, cuts in value added tax on gambling come into effect in January…but do not extend to the online sector.

The Government Gazette informs that VAT will be lifted January 1 on gambling on the outcome of an event, including sports and the services of bookmakers and betting exchanges. Events on which betting and placing of wagers will be exempt include sporting events, both real life and virtual, competitions, lotteries, performance of an index and a natural phenomenon.

Lotteries and the government lotto remain exempt from VAT.

However, gambling on the outcome of casino-type tables games, and any game of chance where the outcome is determined by a random number generator are excluded from the exemptions, as is any gambling with the use of remote gaming equipment.

The tax changes follow a Council of Europe directive on the common system of VAT in the European Union. This directs that EU States may exempt from VAT “betting, lotteries and other forms of gambling subject to the conditions and limitations laid down by each Member State”.

Last year, Malta’s VAT revenue was just over Euro 0.7 billion, which translates to 7.3 percent of the country’s Gross Domestic Product.