VAT Gaming changes for 2018

On 21st November 2017, the Malta VAT Dpt issued guidelines which shall change the VAT treatment of certain supplies related to gambling as of 1st January 2018.

In particular, certain supplies which were historically exempt from VAT will now be brought into the VAT net, in Malta.

The table below provides a general summary of supplies relating to gambling which shall remain exempt from VAT and those which shall attract VAT:

Event betting (including betting exchanges) Casino type games not on a device 
Lotteries and lottery type games P2P games (ex: poker)
Bingo Games of skill
Casino games of chance on devices (land based) including live casino Class 4 type services and other supplies in relation to the above
Qualifying supplies in connection with the above  

The major implications of these changes are as follows:

  1. Gambling providers which supply services listed in the taxable section above need to account for VAT on supplies to customers where the 'place of supply' is deemed to be Malta and forward the relevant VAT due to the local VAT authorities.
  2. Gambling companies providing services which are now deemed to be subject to VAT in Malta shall have a certain right to claim VAT incurred on their purchases.
  3. Gambling companies shall enjoy a VAT exemption on the acquisition of services which are strictly required, related and essential to gambling/betting, where the acquisitions form part of an underlying gambling/betting transaction which is deemed to be exempt from VAT in Malta.

In light of the changes described above, gambling companies are urged to, in particular, study the VAT treatment (in Malta) of their supplies related to gambling as of 1st January 2018 in order to understand their VAT liability in Malta and the underlying effects that these changes may have on their right to claim VAT incurred on purchases. 

Should you have any questions with respect to how these changes shall affect your gambling business, please contact our VAT team.

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