Malta 2015 EU VAT e-services definitions

Tue 24th Mar 2015

Following the 2015 EU VAT B2C electronic services changes, the Maltese government has published guidance on the definition of what characterized as an electronic service. The 2015 electronic services definitions follow the European Commissions amendment to the VAT Directive implementing the 2015 changes (see below).

The key features the Maltese VAT authorities provide to help define a service as electronic include:

  • Delivered over the internet or via an electronic network
  • No (or very limited) manual intervention required

Like the 2015 EU VAT amending notification, the Maltese provide a list of services which are not deemed to be electronic to assist providers understand their likely obligations. These include fees paid for:

  • Services ordered electronically but provided through manual service
  • Online professional services whereby the advice is provided by email and is not automated
  • Purchase of tickets or bookings for live events, hotels etc
  • Provision of books, journals etc via disk, memory stick etc
  • Live online tuition or betting on live events

2015 VAT changes to digital services

The changes introduced across the 28 EU member states related to the place of supply of electronic service provided by EU businesses to EU consumers.

Previously, EU-based providers simply charged consumers from any EU country the VAT of the provider’s country. The tax collected was then paid through their regular VAT return to their home country’s government.

From the start of 2015, this was changed to the VAT being due in the country of the EU consumer. This brought B2C e-services inline with other services – which went through a similar transition in 2010.

In order to avoid the need to have providers register in each member state they were selling to, new VAT reporting portals, Mini One Stop Shop (MOSS), were opened in each country. Providers can now make single, quarterly VAT returns through these portals to declare and pay all EU VAT collected. Each portal, run by the local tax authorities, is then responsible for remitting the VAT to the appropriate member state.

Non-EU digital service providers have been under the obligation to charge local VAT since 2003. The reported the VAT through a single VAT return, known as VOES.

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