Malta to Exempt Betting from VAT

The Maltese government has recently approved a measure that would allow for betting on events, including sports ones, to be exempt from Value Added Tax, local news outlet Times of Maltareported. The measure will come into force on January 1, 2018.

According to a publication in the Government Gazette from earlier this week, betting and wagering as well as the services provided by bookmakers, betting exchanges, and similar entities will no longer be required to pay a VAT.

The Government Gazette publication further clarified that wagers that will be exempt from the tax from next year will include those placed on both actual and virtual sports events, lotteries, competitions, and even bets on the way a natural disaster and an index performs.

The VAT exemption notice pointed out that the exemption from the tax in regard to gambling is outlined in the nation’s Value Added Tax Act. It is also compliant with a Council of Europe directive in relation to the implementation of a common VAT system. Under said directive, individual member states can exempt gambling from VAT subject to their own regulatory limitations and conditions.

Malta generated VAT revenue of more than €700 million last year, which represented around 7% of its annual Gross Domestic Product. According to information from World Bank, the Mediterranean island nation’s GDP exceeded €9.3 billion. It is yet unclear how much the new VAT exemption regulation would affect the nation’s economy and how losses would be offset.