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12.2. VAT on the Supply of Goods by Non-Residents

VAT is chargeable on every supply of goods taking place in Malta by a taxable person i.e. by a person engaged in business, acting as such. VAT is also chargeable on any intra-Community acquisition or importation of goods in Malta. The VAT Act defines a supply of goods as the transfer of the right to dispose of tangible property as owner and includes the transfer of electricity, gas, heat or cooling energy and other sources of energy which may not necessarily be commonly regarded as intangible property. The transfer of an asset which is immovable property by definition of the law including emphyteutical grants exceeding fifty years are also considered as supplies of goods. The transfer of the right to dispose does not refer strictly to the local civil concept of sale but to the wider EU concept of transfer of economic ownership.

A supply of goods that are not transported takes place in Malta if such goods are in Malta at the time when they are placed at the disposal of the person acquiring those goods. Goods that are transported are deemed to be supplied in Malta if the goods are in Malta at the time when the transport of those goods begins. When the transport of goods begins outside the Community and ends in Malta, the supply of those goods by the importer and any subsequent supply up to the acquisition of those goods takes place in Malta.

An intra-Community supply is a supply of goods that are transported by or on behalf of the supplier or to the person to whom the supply is made from one Member State to another Member State

Intra-Community acquisition takes place in Malta when the transport of the goods ends in Malta

An importation of goods in Malta (from a third territory) is subject to VAT in Malta at the time of importation. Customs and excise duty may also be applicable on the importation of goods into Malta.

Goods that are installed or assembled are deemed supplied in Malta if they are installed or assembled in Malta.

VAT is due in Malta on goods supplied on board ships, aircraft or trains during the part of a passenger transport effected in the EU if the place of departure is Malta.

Supplies of goods that qualify as distance sales by business persons in other EU Member States are deemed made in Malta if received in Malta by a non-taxable person if the amount of sales by that person to Malta exceeds the distance sales threshold of Euro 35,000.

Various exemptions apply on supplies of goods that are deemed made in Malta. Exemptions are available with respect to:

  • exports of goods to a destination outside the Community;
  • the supply of goods whilst (or intended to be placed) under a Customs Duty Suspension regime;
  • intra-community supplies to a VAT identified person in another Member State;
  • intra-community supply of a used means of transport to a VAT non-identified person in another Member State;
  • supplies to constructors, owners or  operators of sea-going commercial vessels, rescue, fishing or war vessels or equipment incorporated  therein and goods for the fuelling or provisioning thereof;
  • supplies of aircraft destined to be used by airline operators for international transport of goods or passengers or of equipment used or incorporated therein or goods for the fuelling and provisioning thereof;
  • Supplies of goods on board cruise-liners;
  • Supplies of food, gold and immovable property.