VALUE ADDED TAX _g CAP. 406.  1
CHAPTER 406
VALUE ADDED TAX ACT
To make provision for the imposition of a value added tax in place of an excise tax system
on imports, products and services. 
1st January, 1999
ACT XXIII of 1998, as amended by Legal Notices 17, 21, 22, 28, 29, 30, 60, 89, 116, 142,
198, 199, 200, 201, 217, 223 of 1999, 11, 271, 272, 273 and 274 of 2000, and 23, 24, 25, 93
and 94 of 2001; Act VI of 2001; Legal Notices 149, 171, 233, 234 and 235 of 2001, 180, 205,
387, 388 and 389 of 2002, and 39, 375 and 384 of 2003; and Act X of 2003.
ARRANGEMENT OF ACT
Articles
Part I. Preliminary 1-3
Part II. Scope of the Tax 4-9
Part III. Registered Persons and Exempt Persons 10-17
Part IV. Determination and Payment of the Tax 18-26
Part V. Returns, Assessments, Penalties and Appeals 27-47
Part VI. Records and Information 48-56
Part VII. Special Cases 57
Part VIII. Collection, Security and Refunds 58-71
Part IX. Miscellaneous 72-75
Part X. Offences and Punishments 76-84
Part XI. Transitory Provisions 85-90
SCHEDULES
FIRST SCHEDULE Activities of Public Authorities
SECOND SCHEDULE Supplies of Goods and Services
THIRD SCHEDULE Place of Supply of Services
FOURTH SCHEDULE Exempt Services
FIFTH SCHEDULE Exempt Importation
SIXTH SCHEDULE Small Businesses
SEVENTH SCHEDULE Taxable Value of Supplies and Importations
EIGHTH SCHEDULE Rate of Tax
NINTH SCHEDULE Appeals to the Value Added Tax Appeals Board
TENTH SCHEDULE Forms to be presented with payment of the tax
ELEVENTH SCHEDULE Deductions
TWELFTH SCHEDULE Tax Records
THIRTEENTH SCHEDULE Tax Invoice
FOURTEENTH SCHEDULE Fiscal Receipt
FIFTEENTH SCHEDULE Special Cases
  2  CAP. 406. _h    VALUE ADDED TAX 
PART I
Preliminary
Short title.  1. The short title of this Act is the Value Added Tax Act.
Interpretation. 2. (1) In this Act, unless the context otherwise requires - 
Cap. 197.
Cap. 240.
"accommodation" means accommodation in any premises which
for the purpose of the provision of such accommodation is required
to be licensed in virtue of the Hotels and Catering Establishments
Act or of the Guest Houses and Holiday Furnished Premises Act, or
in virtue of an Act in substitution therefor, and shall include bed
and breakfast, half board or full board, as the case may be, which is
included in the price of such accommodation;
"administrative penalty" means a penalty imposed in virtue of
the provisions of Part V of this Act;
"assessment" means an assessment that may be made in virtue of
the provisions of Part V of this Act but does not include a
provisional assessment;
"assets belonging to an economic activity" include stocks and
tangible fixed assets acquired or used for the purpose of that
economic activity;
"Board" means the Value Added Tax Appeals Board established
in terms of article 45;
"Commissioner" means the Commissioner of Value Added Tax
appointed in terms of the provisions of article 3(1) or any public
officer or other person to whom a delegation has been made in
accordance with subarticle (2) or (3) of that article while he is
acting within the terms of that delegation;
Cap. 337.
"customs bond" means a bond as defined in article 2 of the
Import Duties Act;
"economic activity" has the meaning as is assigned to it in article
5 and with respect to a person who carries on more than one
economic activity means all the economic activities so carried on;
"effective date" means the 1st January, 1999;
"employee" means an individual bound to an employer by a
contract of employment or by other legal ties creating the
relationship of employer and employee as regards working
conditions, remuneration and the employee’s liability and includes
a director of a company or of a corporation constituted by an Act of
Parliament;
"established in Malta" has the meaning assigned to it in
subarticle (2);
"exempt importation" has the meaning assigned to it in article
9(2);
"exempt person" means a person classified as such in terms of
article 13;
"exempt supply" has the meaning assigned to it in article 9(1);
VALUE ADDED TAX _g CAP. 406.  3
"exempt with credit supply" is a supply to which Part One
(Exemptions with Credit) of the Fourth Schedule to this Act
applies;
"importer" with respect to any goods in respect of which tax
becomes due or payable means any person having those goods
standing in his name on the books of the customs department at the
time that tax becomes due or payable, as the case may be;
"input tax" means an amount determined in accordance with
article 23;
"Malta" has the meaning assigned to it by the Constitution and
includes the continental shelf;
"Minister" means the Minister responsible for finance;
"output tax" means the tax referred to in article 22(1);
"person" includes a physical person, a body of persons, a public
authority and any entity capable of carrying on an economic
activity;
"provisional assessment" means a provisional assessment made
in terms of article 32;
Cap. 363.
"public authority" means the Government, a Government
department, a local council set up in accordance with the Local
Councils Act, an authority vested with distinct personality set up by
an Act of Parliament or a corporation constituted by an Act of
Parliament;
"registered person" means a person who has been registered in
accordance with article 11 and whose registration has not been
cancelled in accordance with article 12;
"small business" means an economic activity that qualifies as
such in terms of the Sixth Schedule to this Act;
"tax" means the value added tax chargeable under this Act;
"tax invoice" means the invoice required to be provided in terms
of article 50;
"tax period" has the meaning assigned to it by article 15;
"tax return" means the return required to be furnished in terms of
article 27;
"taxable importation" means an importation on which tax is
chargeable in terms of article 4;
"taxable supply" means a supply on which tax is chargeable in
terms of article 4;
"taxable value" means the value of a taxable supply or of a
taxable importation established in accordance with article 18.
(2) A person carrying on an economic activity shall be deemed
to be established in Malta if -
( a ) he carries on that activity wholly or partly in, from or
through a fixed place situated in Malta; or
( b ) being a body of persons it is constituted under Maltese
  4  CAP. 406. _h    VALUE ADDED TAX 
law;
( c ) being a physical person he has a permanent address or
usually resides in Malta:
Provided that a company registered in Malta which does not
carry on an economic activity in Malta and which is not a company
whose capital or voting rights are owned, directly or indirectly, as
to fifty per cent or more, by individuals who have a permanent
address or who usually reside in Malta, shall not be deemed to be
established in Malta.
Administration. 3. (1) The administration of the Act is vested in the
Commissioner of Value Added Tax, hereinafter in this Act referred
to as "the Commissioner", who shall be a public officer appointed
as such by the Prime Minister.
(2) The Commissioner may delegate to any public officer any
of the rights, duties, powers and other functions vested in him,
conferred to him or imposed upon him by this Act.
(3) The Commissioner may delegate to any other person such
of the rights, duties, powers and other functions vested in him,
conferred to him or imposed upon him by this Act as the Minister
may direct in writing:
Provided that the Commissioner may not delegate those
rights, duties, powers and other functions vested in him if that
person is not considered by the Commissioner as a fit and proper
person to exercise those rights, duties, powers and other functions
and that such person shall be subject to the obligations imposed by
article 56.
PART II
Scope of the Tax
Charge to tax. 4. Subject to the other provisions of this Act there shall be
charged, levied and collected on account of the Government a value
added tax -
( a ) on every supply of goods or services made on or after
the effective date in Malta for a consideration in the
course or furtherance of an economic activity other
than -
(i) an exempt supply,
(ii) a supply made by an exempt person;
( b ) on every importation other than an exempt importation
which takes place on or after the effective date.
Economic activity. 5. (1) Saving the provisions of subarticle (2) an economic
activity means an activity carried on by a person, other than an
employee acting as such, and consisting of any one or more of the
following -
( a ) any trade or business;
( b ) any profession or vocation and the provision of any
personal services;
VALUE ADDED TAX _g CAP. 406.  5
( c ) the exploitation of tangible or intangible property for
the purpose of obtaining income therefrom on a
continuing basis;
( d ) the provision by a club, association or organisation
(for a subscription or other consideration) of the
facilities or advantages available to its members;
( e ) the admission, for a consideration, of persons to any
premises.
(2) The activities of a public authority acting in the exercise of
the functions assigned to it by law shall not be deemed to be an
economic activity except as and to the extent provided in the First
Schedule to this Act.
Supplies of goods 
and supplies of 
services.
6. The provisions of the Second Schedule to this Act shall
apply for the purpose of determining any question as to whether a
transaction -
( a ) is to be treated as a supply of goods or as a supply of
services or as neither a supply of goods nor a supply of
services;
( b ) is to be treated as a supply made for a consideration;
( c ) is to be treated as a supply made in the course or
furtherance of an economic activity.
Place of supply. 
of goods shall be deemed to be made in the country in which the
goods are situated at the time when the supply takes place.
(2) Goods imported into Malta shall be deemed to have been
supplied to the importer outside Malta.
(3) Goods exported out of Malta shall be deemed to have been
supplied by the exporter in Malta.
(4) The place where services are supplied shall be determined
in accordance with the provisions of the Third Schedule to this Act.
Time of supply. 
( a ) a supply of goods shall be deemed to take place at the
time when the goods are delivered or otherwise made
available to the person to whom the supply is made;
( b ) a supply of services shall be deemed to take place on
the date when the services are performed.
(2) Subject to the provisions of subarticle (3) when payment for
a supply is received by the person making the supply before the
time determined in accordance with subarticle (1), the supply shall,
to the extent of the payment so made, be deemed to take place at
such earlier time.
(3) When a tax invoice for a supply is issued before the time
determined in accordance with the provisions of subarticle (1) or
before the expiration of thirty-one days following the time
determined as aforesaid, the supply shall, to the extent of the value
of that invoice, be deemed to take place at the time when the tax
  6  CAP. 406. _h    VALUE ADDED TAX 
invoice is issued.
(4) When services are supplied for a period for a consideration
the whole or part of which is determined or payable periodically or
from time to time, they shall be treated as separately and
successively supplied at the earlier of the following times:
( a ) whenever a payment for such supplies is received, to
the extent covered by that payment; or
( b ) whenever a tax invoice is issued in respect of such
supplies, to the extent covered by that invoice.
Exemptions. 9. (1) The supplies to which the Fourth Schedule to this Act
applies shall be exempt supplies.
(2) The importations to which the Fifth Schedule to this Act
applies shall be exempt importations.
Cap. 337.
(3) Any provision contained in or under any law empowering
the Minister to grant an exemption from import duties on the
importation of goods chargeable under the Import Duties Act shall
be construed as empowering the Minister to grant, in the same
circumstances, in the same manner, and subject to the same
conditions and limitations provided for in any such provision, an
exemption from tax chargeable under this Act on the importation of
the said goods.
PART III
Registered Persons and Exempt Persons
Application for 
registration.
10. (1) Any person who carries on an economic activity shall,
if he is established in Malta and is not a registered person, apply to
the Commissioner to be registered under this Act by not later than
thirty days from the date on which he makes a taxable supply or an
exempt with credit supply.
(2) Any person who carries on an economic activity and is not
established in Malta shall, if he is not a registered person, apply to
the Commissioner to be registered under this Act by not later than
thirty days from the date on which he makes any taxable supply
other than a supply of services made to a registered person
established in Malta who is not an exempt person.
(3) Any person who is not a registered person shall, if so
requested by the Commissioner, apply to be registered under this
Act within thirty days from the date on which he is served with a
notice containing such a request.
(4) Any person who is not a registered person and who carries
on or intends to carry on an economic activity may apply to be
registered under this Act.
(5) An application for registration under this Act shall be made
on such form as may be issued by the Commissioner or as may be
prescribed and in such manner and shall contain such particulars as
may be required by the Commissioner or as may be prescribed.
(6) The Minister may by regulations exempt any person or
VALUE ADDED TAX _g CAP. 406.  7
class of persons from the provisions of this article and may by such
regulations make such an exemption subject to such conditions and
limitations as may be prescribed.
Registration.
his opinion is liable to apply for registration in terms of article
10(1) or (2).
(2) The Commissioner shall register any person who has made
an application in terms of article 10(4) if he is satisfied that that
person carries on or intends to carry on an economic activity and is
likely to make taxable supplies or exempt with credit supplies in
the course or furtherance thereof.
(3) The Commissioner shall allocate a registration number for
every person registered under this Act and shall deliver to that
person a registration certificate containing such particulars as the
Commissioner may deem appropriate.
(4) The Minister may by regulations make provision for the
registration of a number of persons as one person or for a person to
be registered separately in respect of different branches or
departments of his economic activity in such circumstances, in
respect of such supplies and subject to such conditions as may be
specified in the said regulations.
(5) Every registered person shall within fifteen days from the
happening of any of the following events notify that event in
writing to the Commissioner:
( a ) a change in circumstances that affect the particulars
declared in the application for his registration or
otherwise furnished to the Commissioner in
connection with his registration or appearing in the
registration certificate;
( b ) the cessation or transfer of his economic activity or
part thereof;
( c ) such other event as may be prescribed.
Cancellation of 
registration.
12. (1) The Commissioner may at any time cancel the
registration of a person if he has reason to believe that that person
does not carry on or has ceased to carry on an economic activity or
that that person is not likely to make taxable supplies or exempt
with credit supplies.
(2) The Commissioner shall serve a notice on any person
whose registration has been cancelled, indicating the date on which
that person has ceased to be a registered person. 
(3) When the registration of a person who is not an exempt
person is cancelled he shall be deemed to have, immediately before
such cancellation, made a supply of all the assets that belonged to
his economic activity at that time subject to the relevant provisions
of the Second Schedule to this Act and shall account for such a
supply in the tax return for his last tax period: 
Provided that the Commissioner may, when he has reason
to believe that the taxable value of the said deemed supply is less
  8  CAP. 406. _h    VALUE ADDED TAX 
than one hundred liri, or such other amount as may be prescribed,
exempt that person from accounting for that supply as aforesaid.
(4) The cancellation of the registration of a person shall not
relieve that person from any liability incurred before the date of the
cancellation or in virtue of anything done or omitted to be done
before that date, or from the obligation to make an application for a
fresh registration in any of the circumstances referred to in article
11.
Classification as 
exempt person.
13. (1) When a registered person or a person who applies for
registration carries on an economic activity which qualifies as a
small business he may apply to the Commissioner to be classified
as an exempt person.
(2) Where the Commissioner is satisfied that a person who has
made an application as aforesaid is eligible to be so classified he
shall classify that person as an exempt person and shall serve a
notice on that person indicating the date of that classification.
(3) When a person is classified as an exempt person on a date
other than the date of his registration he shall be deemed to have,
immediately before the date of that classification, made a supply of
all the assets that belonged to his economic activity at that time
subject to the relevant provisions of the Second Schedule to this
Act and shall account for such a supply in the tax return for his last
tax period:
Provided that the Commissioner may, when he has reason
to believe that the taxable value of the said deemed supply is less
than one hundred liri, or such other amount as may be prescribed,
exempt that person from accounting for that supply as aforesaid.
Cancellation of 
exempt person 
classification .
14. (1) An exempt person shall within thirty days from the
date on which he does not remain eligible to be classified as an
exempt person apply to the Commissioner for the cancellation of
his classification.
(2) An exempt person may apply to the Commissioner for the
cancellation of his classification at any time in which he may be so
entitled.
(3) When the Commissioner is satisfied that an exempt person
who has made an application for the cancellation of his
classification was required by subarticle (1) or entitled under
subarticle (2) to make that application or where he otherwise has
reason to believe that an exempt person is not eligible to remain
classified as an exempt person he shall cancel the classification of
that person as an exempt person and shall notify that person
accordingly.
Tax period. 15. (1) The Commissioner shall allocate a tax period to every
registered person who is not classified as an exempt person.
(2) Except as otherwise provided in this article a tax period
means a period of three calendar months commencing on the first
day immediately following the end of the preceding tax period.
VALUE ADDED TAX _g CAP. 406.  9
(3) The Minister may by regulations prescribe in respect of
such class or classes of persons as may be specified in the said
regulations a tax period of more or less than three months.
(4) The first tax period for a person shall commence on the date
a person is registered and end on such date as may be determined
by the Commissioner.
(5) When, during a tax period of a person, his registration is
cancelled or he is classified as an exempt person, that period shall
end on the date of that cancellation or classification and shall be the
last tax period of that person, saving the allocation of a new tax
period to that person should he be re-registered or should his
classification be cancelled.
(6) The Commissioner may by means of a notice served on a
registered person in any particular case vary any tax period for that
person in such manner as may be specified in that notice.
Applicability of the 
Sixth Schedule.
16.  The provisions of this Part shall apply subject to the
provisions of the Sixth Schedule to this Act.
Further 
classification of 
registered persons.
17. Without prejudice to the other provisions of this Part the
Commissioner may classify registered persons by reference to the
description or sector of their economic activity and such other
matters as he may deem necessary or appropriate and any
classification so made shall, unless the contrary is proved, be
deemed to be a correct classification for the purpose of determining
the applicability or otherwise of any provision of this Act to which
the classification may be relevant.
PART IV
Determination and Payment of the Tax
Taxable value.
established in the manner laid down in the Seventh Schedule to this
Act and in the provisions relating to the taxable value of supplies
contained in the Second Schedule to this Act subject to any other
provision applicable in terms of this Act in any specific case.
Rate of tax. 
( a ) at the rate of fifteen per cent of the taxable value of
every taxable supply other than a supply referred to in
paragraph ( c );
( b ) at the rate of fifteen per cent of the taxable value of
every taxable importation;
( c ) at such rates as may be specified in the Eighth
Schedule to this Act, not being higher than fifteen
percent of the taxable value of the taxable supplies or
the taxable importations specified in the said
Schedule.
Persons liable for 
the payment of the 
tax.
20. (1) The tax due on a taxable supply shall be a liability of
the person who makes the supply.
(2) The tax due on a taxable importation of goods shall be a
  10  CAP. 406. _h    VALUE ADDED TAX 
liability of the importer of those goods.
Time when tax 
becomes due and 
payable.
21. (1) The tax chargeable on a taxable supply shall become
due at the time when the supply takes place and shall be payable at
the time and in the manner provided for in article 22.
(2) The tax chargeable on a taxable importation shall become
due at the time when the importation takes place and shall be
payable to the Comptroller of Customs on behalf of the
Commissioner before the imported goods are delivered for use or
consumption in Malta.
Payment of the tax 
on taxable 
supplies.
22. (1) The tax due by a person on taxable supplies made by
him during a tax period shall be the output tax of that person for
that tax period and shall, to the extent that it exceeds the deductions
allowable to that person for that period and is not set off against
any excess credit due to him in virtue of this Act, be paid to the
Commissioner by not later than the date and time by which that
person is required to furnish a tax return for the relative tax period.
(2) Interest shall be due on any tax which is not paid by the
date on which it becomes payable in accordance with this article at
the rate of one per cent for each month or part thereof during which
the said tax remains unpaid or at such other rate as may be
prescribed.
(3) The manner in which payment of the tax is made and the
receipt to be issued by the Commissioner, shall be those as the
Commissioner may direct. The forms to be presented with the
payment of the tax shall be those set out in the Tenth Schedule to
this Act.
Input tax. 23. The input tax of a person is the total of the tax chargeable
on supplies made to him and the tax paid on taxable importations
made by him to the extent that the supplies so made or the goods so
imported have been or will be wholly used by him in the course or
furtherance of his economic activity.
Credit for input 
tax.
24. (1) Subject to the other provisions of this article, there
shall be allowed for every tax period of a person a credit equivalent
to so much of the input tax of that person for that period as is
attributable to supplies made or to be made by that person, being
supplies to which subarticle (3) applies.
(2) Subject to the other provisions of this article, there shall be
allowed for the last tax period of a person whose registration has
been cancelled and for the last tax period of a person who has been
classified as an exempt person a credit equivalent to so much of the
input tax of that person for that period as is attributable to supplies
made by him up to the end of that tax period being supplies to
which subarticle (3) applies.
(3) This subarticle applies to:
( a ) taxable supplies;
( b ) exempt with credit supplies;
( c ) supplies made or to be made by that person outside
VALUE ADDED TAX _g CAP. 406.  11
Malta to the extent that the said supplies outside Malta
would, had they been made in Malta, have been treated
under the provisions of this Act as taxable supplies or
as exempt with credit supplies,
but does not apply to supplies deemed to be made by a person to
himself in terms of the provisions of article 65.
(4) Where the input tax of a person for a tax period includes tax
on any supplies of goods or services made to that person or on
goods imported by that person which have been or which are to be
used by that person both for the purpose of making supplies to
which subarticle (3) applies and also for other purposes, there shall
be deemed to be attributable to supplies to which the said subarticle
applies such portion of the tax on the said supplies of goods or
services as may be prescribed.
(5) The Minister may by regulations make provisions for the
determination of the input tax and the attribution of input tax and
may by such regulations prescribe -
( a ) that input tax of a registered person shall not be
allowed as a credit unless it is supported by tax
invoices or by such other evidence as may be
specified;
( b ) that the credit for input tax shall not include tax
chargeable on such supplies or importations as may be
specified;
( c ) that tax chargeable on such supplies or importations
and in such circumstances as may be specified made to
or by a person shall be treated as input tax of another
person;
( d ) that the attribution of input tax of a person to supplies
shall be determined by reference to a number of tax
periods and that any attribution which may have
already been made for the said tax periods in
accordance with the other provisions of this article
shall be adjusted in such manner as may be specified
in the said regulations;
( e ) such other provisions as may be deemed necessary for
the purpose of securing a fair and reasonable
attribution of input tax to supplies.
(6) Until such time as the Minister prescribes regulations in
terms of subarticle (5), the rules specified in the Eleventh Schedule
to this Act shall apply.
Deductions. 
shall be entitled to claim as deductions for that period:
( a ) the amount of the credit for input tax allowable to him
for that period;
( b ) such further deductions as may be prescribed.
(2) Where the output tax of a person for a tax period exceeds
the deductions that he may claim in terms of subarticle (1) that
  12  CAP. 406. _h    VALUE ADDED TAX 
person may set off against such excess any excess credit for any
previous tax period that has not yet been paid to him in accordance
with article 26.
Refund of excess 
credit.
26. (1) Saving the other provisions of this Act, when the
deductions allowable to a person for a tax period exceed the output
tax of that person for that period, the excess shall be an excess
credit of that person for that period.
(2) The amount of excess credit of a person for a tax period
shall, to the extent that it is not set off against any amount due by
that person to the Commissioner in accordance with the other
provisions of this Act, be a refund payable to that person by not
later than five months from the expiration of the time allowed for
the furnishing of the tax return for that tax period or from the day
on which the said return has been furnished to the Commissioner,
whichever is the later.
(3) Interest shall be due to a person to whom a refund is due in
accordance with this article at the rate specified in or prescribed in
terms of article 22(2) from the date when the refund becomes
payable in accordance with this article until the date when it is paid
or when a cheque or draft for the payment thereof is given or posted
to, that person by the Commissioner.
(4) The Commissioner may, for the purpose of any such
verifications as he may consider necessary to ascertain the amount
refundable, extend the time limit referred to in subarticle (2) by not
more than twelve months: provided that the running of interest on
the said refund shall not be meanwhile suspended.
PART V
Returns, Assessments, Penalties and Appeals
Tax returns. 27. (1) Every registered person who is not an exempt person
shall furnish the Commissioner with a tax return for every tax
period by not later than the fifteenth day of the second month
following the month during which that tax period ends.
(2) Every person whose registration has been cancelled and
every registered person who is classified as an exempt person shall
furnish the Commissioner with a tax return relating to the last tax
period within thirty days from the date on which he is served in
with a notice referred to article 12(2) or of article 13(2), as the case
may be, or within such longer period as may be specified in the said
notice.
(3) A tax return shall contain a declaration of the output tax
and the deductions for that period and it shall contain such other
declarations and particulars and be made on the form as prescribed
in the Tenth Schedule to this Act.
(4) A tax return shall not be deemed to have been furnished
unless it is full and complete in all material respects and unless and
until the tax resulting to be payable in accordance with the
declarations made therein has been paid to the Commissioner:
provided that when a payment is made by a person to the
VALUE ADDED TAX _g CAP. 406.  13
Commissioner in circumstances which indicate that that person
intended that payment to relate to a tax return, that payment shall
be deemed to relate to that tax return for the purposes of this
subarticle without prejudice to the power of the Commissioner
under any other provision of this Act to appropriate that payment in
any other manner.
Adjustments to tax 
returns.
28. A person who has made an incorrect declaration in a tax
return furnished to the Commissioner for a tax period may request
by means of a notice to the Commissioner to make an adjustment to
that tax return in the circumstances set out in the Twelfth Schedule
to this Act and such an adjustment shall be made to the extent
allowed and shall have the effects specified in the said Schedule.
Presumption as to 
declarations in tax 
returns.
29. When a person has furnished the Commissioner with a tax
return for a tax period, the output tax and the deductions of that
person for that period shall, except as provided in article 36, be
deemed to be the output tax and the deductions declared in that
return as adjusted by any adjustment made in accordance with
article 28.
Declarations by 
exempt persons 
and other 
statements, etc.
30. (1) Every exempt person shall make such periodical or
other declarations as may be prescribed.
(2) Every person carrying on or intending to carry on or who
has ceased to carry on an economic activity shall furnish such
statements and information and shall produce such documents as
may be reasonably required by the Commissioner for any purpose
of this Act or as may be prescribed.
Power to make 
assessments where 
a return has not 
been furnished.
31. (1) When a person liable to furnish a tax return for a tax
period does not furnish that return the Commissioner may make an
assessment of the output tax and the input tax of that person for that
period and of the administrative penalty to which that person
became liable and serve that assessment on that person at any time
after the expiration of the time allowed in terms of this Act for the
furnishing of that return and by not later than six years from the end
of the said tax period.
(2) An assessment made for a tax period of a person in virtue of
this article shall not relieve that person from his obligation to
furnish a tax return for that period and from his liability to any or to
further administrative penalties in accordance with the relevant
provisions of this Act.
(3) When a tax return for a tax period is furnished after an
assessment has been made in accordance with subarticle (1) the
Commissioner may cancel that assessment without prejudice to his
power to make further assessments in terms of the other provisions
of this Act.
(4) The cancellation of an assessment as aforesaid shall not
relieve the person who has been in default from his liability to an
administrative penalty in accordance with the other provisions of
this Act.
  14  CAP. 406. _h    VALUE ADDED TAX 
Power to make 
assessments when 
a return has been 
furnished.
32. (1) When the Commissioner has reason to believe that a
tax return furnished by a person for a tax period does not contain a
full and correct statement of the matters required to be declared in
that return he may make a provisional assessment of the output tax
and the input tax of that person for that period and of the
administrative penalty to which that person became liable and serve
that provisional assessment on that person by not later than six
years from the end of the said tax period.
(2) A provisional assessment shall indicate clearly that it is a
provisional assessment and that it may be followed by an
assessment within the time limits specified in subarticle (3). Save
as aforesaid a provisional assessment shall contain the particulars
that are required to be given in an assessment and such further
particulars as the Commissioner may deem appropriate.
(3) After the expiration of a period of not less than thirty days
and not more than six months from the service on a person of a
provisional assessment in respect of a tax period the Commissioner
may make an assessment of the output tax and the input tax of that
person for that period and of the administrative penalty to which
that person became liable and serve that assessment on that person.
(4) The assessment made in virtue of subarticle (3) may not
contain any variations to the amounts specified in the relative
provisional assessment except for -
( a ) variations requested by or agreed to by the said person;
( b ) variations consisting in the substitution for amounts
shown in the provisional assessment of amounts that
are equal or closer to those declared in the relative tax
return.
Power to make 
assessments on 
exempt persons.
33.  When the Commissioner has reason to believe that a person
has become liable to an administrative penalty with respect to
anything made by him during any period in which he was classified
as an exempt person he may make an assessment of that penalty
and serve that assessment on that person within six years from the
end of that period.
Assessments.  34. (1) An assessment made in virtue of article 31, article 32
or article 33 shall be made on such form and contain such further
particulars as the Commissioner may deem appropriate or as may
be prescribed.
(2) An assessment may be made by reference to such
information, estimations or criteria as the Commissioner may, in
his judgment, deem appropriate.
Additional and 
revised 
assessments.
35. The power to make an assessment includes the power to
make an additional or a revised assessment within the same time
limits and subject to the same provisions applicable to an original
assessment: provided that the Commissioner may not reopen any
matter that has been decided on appeal.
Presumption as to 
amounts shown in 
assessments.
36. Where an assessment is made for a tax period any amount
of tax and deductions assessed in that assessment shall, except if
and to the extent that the assessment is cancelled or revised, be
VALUE ADDED TAX _g CAP. 406.  15
deemed to be and to have always been the tax and the deductions
properly due and allowable for that period for any of the purposes
of this Act.
Administrative 
penalty for 
incorrect tax 
return.
Amended by:
X. 2003.20.
37. (1) Saving the provisions of subarticle (2), when a tax
return furnished by a person registered under article 10 for a tax
period contains an understatement of the output tax or an
overstatement of the deductions for that period, that person
becomes liable to an administrative penalty in an amount
equivalent to twenty per cent of the total of -
( a ) the excess, if any, of the correct amount of output tax
over the output tax as declared in the return; and
( b ) the excess, if any, of the deductions as declared in the
return over the correct amount of the deductions.
(2) Where a person corrects an understatement or
overstatement as is referred to in subarticle (1) in accordance with
the provisions of article 28(1) before he is served with a provisional
assessment for that period, that person becomes liable to an
administrative penalty in an amount equivalent to ten per cent of
the total of -
( a ) the excess, if any, of the correct amount of output tax
over the output tax as declared in the return; and
( b ) the excess, if any, of the deductions as declared in the
return over the correct amount of the deductions.
(3) Where a tax return furnished to the Commissioner by a
person registered under article 10 for a tax period does not contain
a full and correct statement of the matters required to be declared
by that person in that return and to the extent that that person does
not correct such an understatement or overstatement in accordance
with the provisions of article 28 before he is served with an
assessment for that period he shall, unless that person has in virtue
of that default become liable to a higher administrative penalty
under the other provisions of this article be liable to an
administrative penalty of two hundred liri.
Administrative 
penalty for default 
in the furnishing of 
a tax return.
38. Any person who, being required to furnish a tax return for
a tax period, does not furnish that return within the time laid down
in the relevant provisions of this Act shall be liable to an
administrative penalty in an amount equivalent to the higher of -
( a ) one per cent of the excess, if any, of the output tax
over the deductions, disregarding any excess credit
brought forward from a previous tax period, as
declared in the return; and
( b ) ten liri,
for every month or part thereof that elapses from the date by which
the tax return should have been furnished in accordance with this
Act and the date when it is furnished to the Commissioner.
  16  CAP. 406. _h    VALUE ADDED TAX 
Administrative 
penalty for default 
in application for 
registration.
39. Any person who, being required to apply for registration
under this Act, does not make such an application within the time
laid down in the relevant provisions of this Act shall be liable to an
administrative penalty in an amount equivalent to the higher of - 
( a ) one per cent of the excess, if any, of the output tax
over the deductions for the first tax period following
the registration; and
( b ) ten liri,
for every month or part thereof that elapses from the date on which
the application should have been made in terms of the said
provisions and the earlier of the date on which the registration is
furnished to the Commissioner and the date when that person is
registered by the Commissioner.
Administrative 
penalty for default 
by exempt person.
40. An exempt person who does not remain eligible to be
classified as an exempt person and who does not apply for the
cancellation of his classification within the time laid down in the
relevant provisions of this Act shall be liable to an administrative
penalty in an amount equivalent to the higher of -
( a ) ten per cent of the excess, if any, of the output tax over
the deductions for the first tax period following the
cancellation of his classification; and
( b ) one hundred liri,
for every month or part thereof that elapses from the date on which
the application should have been made in terms of the said
provisions and the earlier of the date on which the application is
furnished to the Commissioner and the date when the classification
is cancelled by the Commissioner.
Liability to 
administrative 
penalties.
41. Any administrative penalty to which a person becomes
liable in terms of this Act shall be due and payable by that person
without the need of any assessment to be made with respect thereof,
and any amount of any administrative penalty due by a person shall
not relieve that person from a higher or from a further penalty to
which he may have become or may become liable in terms of the
relevant provisions of this Act.
Reasonable 
excuse.
42. Notwithstanding the provisions of articles 37 to 41,
inclusive, of this Act no administrative penalty shall be due by a
person for any default if that person shows that there is a
reasonable excuse for the default:
Provided that:
( a ) an insufficiency of funds to pay any tax due; or
( b ) when reliance is placed on any other person to perform
any task, the fact of that reliance or any dilatoriness or
inaccuracies on the part of the person relied upon,
shall not constitute a reasonable excuse for the purposes of this
article.
Appeal against an 
assessment.
43. Any person aggrieved by an assessment served upon him
VALUE ADDED TAX _g CAP. 406.  17
may appeal against that assessment to the Value Added Tax
Appeals Board.
Other matters that 
may be referred to 
Appeal.
44. If any question arises, other than on an assessment, relating
to - 
( a ) the registration of a person under this Act or the
cancellation of such a registration;
( b ) the classification of any registered person as an
exempt person or the cancellation of such
classification;
( c ) whether a transaction made or to be made by a person
is a taxable supply or not or whether an importation of
goods made or to be made by a person is a taxable
importation or not;
( d ) any tax chargeable on the importation of goods;
( e ) the place, the time or the taxable value of a supply;
( f ) the amount of deductions allowable to a registered
person for any tax period;
( g ) any security required by the Commissioner under this
Act;
( h ) whether any refund of tax claimed by any person is
due or payable to that person or not;
( i ) any question of law not falling within the foregoing
provisions of this article;
( j ) any matter which, in terms of any provision of this
Act, or of any regulations made under this Act, may be
referred to appeal;
( k ) the imposition of any administrative penalty,
that question may be referred to the Value Added Tax Appeals
Board by any person who shows to the satisfaction of the Board
that he has a direct interest in that question or by the
Commissioner.
Value Added Tax 
Appeals Board.
45. There shall be a Value Added Tax Appeals Board   for the
purpose of hearing and determining appeals and references made in
accordance with articles 43 and 44.
Matters regulated 
by the Ninth 
Schedule.
46. The Ninth Schedule to this Act shall apply with respect to
any appeal made or any question referred to the Board, the
composition and competence of the Board, and the regulation of the
procedures of the Board.
Appeal to the 
Court of Appeal.
Amended by:
VI. 2001.30.
47. (1) Any of the parties to an appeal or a reference to the
Board   who feels aggrieved by the decision of that Board may
appeal against that decision to the Court of Appeal (Inferior
Jurisdiction) on any question of law only by means of an
application to be filed within thirty days from the date on which the
decision appealed from is notified to him.
Cap. 12.
Organization and Civil Procedure may make regulations governing
appeals under this article.
  18  CAP. 406. _h    VALUE ADDED TAX 
(3) The Minister responsible for justice may by regulations
under this subarticle establish the fees payable in the registry of the
court in relation to the filing of judicial acts in connection with
appeals to the Court of Appeal (Inferior Jurisdiction) under this
Act:
Cap. 12.
Provided that until fees are so established by the Minister,
the fees contained in Schedule A to the Code of Organization and
Civil Procedure shall apply.
PART VI
Records and Information
Records to be kept. 48. (1) Every registered person shall keep proper and
sufficient records of all transactions carried out in the course or
furtherance of his economic activity to enable the date, the value
and the nature of such transactions, the tax chargeable thereon and
the deductions allowable in respect thereof, and any such other
information as is set out in the Twelfth Schedule to this Act.
(2) The records referred to in subarticle (1) shall be kept and
stored in the manner, contain the details and be supported by the
documents and accounts as set out in the said Schedule and shall be
retained, whether or not that person remains a registered person, for
a period of at least six years from the end of the year to which they
relate.
(3) The Minister may make regulations requiring registered
persons to store, process and produce information and documents
on or by such means and machines as may be specified in such
regulations.
(4) The Commissioner may at any time within the period
specified in subarticle (2) request any registered person to produce
the records, documents and accounts required to be kept by him in
virtue of this article.
Price marking. 49. Where any registered person indicates the price of goods
offered for sale by retail, such price shall be indicated in such a
manner as to be inclusive of the tax chargeable under this Act, if
any, on the supply of the said goods.
Tax invoice. 50. (1) Every registered person, other than a retailer, who
makes a supply other than a supply to which Part Two of the Fourth
Schedule to this Act (exemptions without credit) refers to another
registered person shall provide that other person with a tax invoice
within thirty-one days from the date referred to in article 8(1).
(2) A registered person who is a retailer and who makes a
taxable supply to any other registered person shall, at the request of
that other person, provide him with a tax invoice within thirty one
days from the date referred to in article 8(1). 
(3) Where a registered person provides a document to himself
which purports to be a tax invoice in respect of a taxable supply
made to him by another registered person, that document may, with
the approval of the Commissioner, be treated as the tax invoice
required to be provided by the supplier in terms of this article. 
VALUE ADDED TAX _g CAP. 406.  19
(4) The form of a tax invoice, the form of an invoice to be
issued by an exempt person, the particulars to be shown in any such
invoice and the manner in which any such invoice shall be issued,
shall contain the information set out in the Thirteenth Schedule to
this Act.
Documents to be 
provided in other 
cases.
51. Any registered person who makes any supply, other than a
supply to which article 50 applies, is to provide to the person to
whom the supply is made such invoice, receipt or other document
as is set out in the Fourteenth Schedule to this Act and shall be in
the form and shall show the particulars and shall be issued in the
manner set out in the said Schedule.
Production of 
invoices by 
persons to whom a 
supply is made.
52.  A person to whom any tax invoice or other invoice, receipt
or document is provided as required by article 50 or 51 shall, if so
requested in accordance with the other provisions of this Act,
produce the said invoice, receipt or other document to the
Commissioner or to any officer authorised by the Commissioner.
Inspections. 
compliance with the provisions of this Act, have the power -
( a ) to enter and inspect any premises where an economic
activity is carried on or suspected to be carried on or
where any goods, assets, books, records or documents
relating to such activity are kept or suspected to be
kept;
( b ) to inspect and to require the production of any books,
records or documents, including machine readable
information, or a copy or extract thereof relating to the
economic activity of any person;
( c ) subject to the provisions of article 55, to require any
person to give such information as may be requested
for the purpose of determining whether any taxable or
exempt with credit supplies have been made by or to
that person or the value of any such supplies and to
request the attendance of any person at the office of
the Commissioner for the purpose of providing such
information;
( d ) to request the particulars including the name, surname,
address and the production of the Identity Card of any
person suspected to be in breach of any of the
provisions of this Act or of any regulations made
under this Act.
Access to places of 
habitation.
54. If access is required for the purposes of article 53( a ) to any
premises occupied in whole or in part for the purpose of habitation,
such access shall require the prior warrant signed by a Magistrate
and shall not take place between seven o’clock in the evening and
seven o’clock in the morning.
Information held 
by certain licensed 
persons.
55. (1) Without prejudice to the provisions relating to the duty
of professional secrecy, no information shall be requested by the
Commissioner by virtue of this Act from any persons to whom
subarticle (2) refers except solely for the purpose of determining
the tax payable by and the deductions allowable to such person
  20  CAP. 406. _h    VALUE ADDED TAX 
under this Act or of ensuring compliance by such person with the
provisions of this Act.
(2) This subarticle refers to -
Cap. 371. ( a ) a bank licensed under the Banking Act;
Cap. 403.
( b ) an insurance company in respect of long term
insurance business which is carried on pursuant to a
licence granted under the Insurance Business Act;
Cap. 370.
( c ) any person licensed to carry on investment business
under the Investment Services Act; 
Cap. 370.
( d ) a collective investment scheme licensed under the
Investment Services Act;
Cap. 345.
( e ) a stockbroker licensed under the Malta Stock
Exchange Act.
Official secrecy. 56. (1) Except as may be necessary for the purposes of this
Act, or where the Prime Minister otherwise directs, every person
having any official duty or being employed in the administration of
this Act shall regard and deal with all documents and information
relating to this Act as secret and confidential.
(2) No person appointed under or employed in carrying out the
provisions of this Act shall be required to produce in any court,
tribunal, board or committee of inquiry any document or to divulge
an matter coming under his notice in the performance of his duties
under this Act except as may be lawfully required for the purpose
of carrying into effect the provisions of this Act, or for the purpose
or in the course of any appeal made in accordance with this Act or a
prosecution for any offence against any of the provisions of this
Act.
(3) Notwithstanding the other provisions of this article, the
Commissioner may permit the Auditor General or any officer
authorised by the Auditor General to have access to any records or
documents as may be necessary for the performance of his official
duties and for this purpose the Auditor General and any such
authorised officer shall be deemed to be a person employed in the
administration of this Act.
(4) Notwithstanding the provisions of the other subarticles of
this article or of any other law, the Commissioner shall furnish to
the Commissioner of Inland Revenue such information, being
information obtained by the Commissioner for any of the purposes
of this Act, as may be directed by the Minister.
PART VII
Special Cases
Special cases. 57. (1) The Minister may by regulations prescribe special
provisions with respect to supplies to which subarticle (2) applies,
and may, by such regulations, make provision -
( a ) for a supply to be treated as two or more separate
supplies or for a number of supplies to be treated as a
single supply;
VALUE ADDED TAX _g CAP. 406.  21
( b ) for the time and place at which supplies shall be
treated to take place;
( c ) for the taxable value of supplies to be determined by
such method or one of such methods as may be
established by the Commissioner;
( d ) for the determination of the input tax attributable to
supplies;
( e ) for additional records and documents that must be kept
and produced in respect of the said supplies,
and any such regulations shall apply notwithstanding anything to
the contrary contained in this Act.
(2) This subarticle applies to -
( a ) supplies made by tour operators and travel agents and
by other persons acting as principals and making
supplies commonly provided by tour operators and
travel agents;
( b ) supplies of second-hand goods;
( c ) supplies by retailers;
( d ) supplies of professional services;
( e ) supplies under civil, mechanical and electrical
engineering contracts;
( f ) such other supplies as may be designated for the
purposes of this article by an order made by the
Minister and published in the Gazette.
(3) Until such time as regulations are made by the Minister in
accordance with this article the rules set out in the Fifteenth
Schedule to this Act shall apply.
PART VIII
Collection, Security and Refunds
Suit by the 
Commissioner.
58. (1) Tax and administrative penalties due under this Act
may be sued for and recovered, as the case may require in the
competent court of civil jurisdiction.
(2) Subject to the provisions of subarticle (3), action for the
payment of tax and administrative penalties may be taken by the
Commissioner at any time within six years from the date on which
such tax or administrative penalty becomes payable.
(3) The running of the period referred to in subarticle (2) shall
be interrupted by any judicial act filed before the expiration of such
period by the Commissioner demanding the payment of the amount
claimed.
  22  CAP. 406. _h    VALUE ADDED TAX 
Executive title.
Cap. 12.
59. (1) Any notice issued by the Commissioner showing any
amount of tax and administrative penalty due by a person shall,
unless the contrary is proved, be sufficient evidence that that
amount is due to the Commissioner by that person and shall
constitute an executive title within the meaning and for the
purposes of Title VII of Part I of Book Second of the Code of
Organization and Civil Procedure.
(2) The Commissioner may request the payment of any tax and
administrative penalty payable by any person in terms of this Act
by means of a demand note, and if the payment requested is not
made within thirty days from the date when the said demand note is
served on that person, the Commissioner may proceed to enforce
payment in virtue of the executive title referred to in subarticle (1)
after two days from the service on that person of an intimation for
payment made by means of a judicial act.
Cap. 12. (3) The provisions of article 468 of the Code of Organisation
and Civil Procedure shall apply with respect to any warrant issued
on the strength of an executive title mentioned in this article and to
the paying out of the proceeds of the sale by auction of the property
seized, and no opposition or reservation in the schedule of deposit
shall stay the paying of any sum deposited in court following any
such warrant as aforesaid.
Restrictions on the 
release of imported 
goods.
60. (1) No goods imported into Malta shall be delivered for
use in Malta or taken out, cleared or delivered from any customs
bond except -
( a ) where the importation of those goods is an exempt
importation; or
( b ) where the tax on the said importation has been paid in
accordance with this Act; or
( c ) with the authorisation of the Commissioner.
(2) An authorisation for the purpose of paragraph ( c ) of
subarticle (1) may be given under such conditions and against the
granting of such security as the Commissioner may establish.
Powers relating to 
imported goods.
61. (1) The Comptroller of Customs shall, for the purpose of
ascertaining, collecting and protecting on behalf of the
Commissioner the tax chargeable under this Act on taxable
importations have the same powers and shall follow the same
procedures as are in accordance with any other law exercisable and
followed by him for the purpose of ascertaining, collecting and
protecting import duties.
Cap. 37.
Cap. 337.
(2) Any provision in the Customs Ordinance or in the Import
Duties Act or in any regulations made thereunder relating to the
application of the proceeds from a sale of imported goods towards
the payment of import duties due on those goods shall be construed
as providing for the application of the said proceeds towards the
payment of import duties and of any tax due under this Act on the
importation of those goods.
VALUE ADDED TAX _g CAP. 406.  23
Special privilege.
Cap. 16.
62.   The Commissioner shall have a special privilege over the
assets forming part of the economic activity of a person in respect
of any tax due by that person under this Act and the said tax shall,
notwithstanding anything contained in any other law, be paid in
preference to a debt having any other privilege, excepting a debt
having a general privilege and a debt mentioned in article 2009( a )
or ( b ) of the Civil Code.
Security for tax 
due on supplies.
63. (1) If, in any particular case, the Commissioner has reason
to believe that tax due by a registered person might not be
recoverable at the time when that tax becomes payable in terms of
this Act, he may by a notice served on that person, demand the
payment of the tax within such time as may be specified in that
notice and the tax shall thereupon become payable within that time
notwithstanding any other provision of this Act.
(2) When a payment has been demanded from a person in
accordance with subarticle (1), that person may, instead of making
the said payment, furnish such security for the tax payable as may
be acceptable to the Commissioner.
Shorter period for 
the delivery of a 
return.
64. If, in any particular case, the Commissioner has reason to
believe that the tax due by a registered person could otherwise be
prejudiced, he may, by means of a notice in writing, require that
person to furnish a tax return for a tax period before the time
allowed in terms of the other provisions of this Act, and in respect
of that tax return any reference in this Act to the time allowed in
terms of any provision of this Act shall thereupon be construed as a
reference to the period specified in the said notice.
Reverse charge.
is not established in Malta to a registered person who is established
in Malta and who is not an exempt person the said person
established in Malta shall be deemed to have himself supplied those
services to himself in the course or furtherance of his economic
activity and the provisions of this Act, including the obligation to
account for and to pay the tax, shall, except where otherwise
expressly provided, be read and construed accordingly.
Representatives.
principal officer of an entity or of a body of persons, any heir and
any testamentary executor and any curator of the vacant inheritance
of a deceased person, and any person who is a tutor, curator,
administrator or trustee of any other person or of any trust, fund or
other entity shall, for the purposes of this Act, be a representative
of that body of persons, deceased person, other person, trust, fund
or other entity, as the case may be.
(2) When a person who is not established in Malta is or is
required to be registered under this Act any person resident in
Malta to whom he makes a taxable supply or who is his agent or
who otherwise has a business relationship with him shall, if so
designated by the Commissioner by means of a notice in writing,
and unless another person resident in Malta and acceptable to the
Commissioner has been so designated by that first-mentioned
person, be a representative of the said person.
(3) ( a ) Subject to the provisions of subarticle (5) a
  24  CAP. 406. _h    VALUE ADDED TAX 
representative of a person shall be liable in the same
manner and to the same extent as the person of whom
he is a representative for all the obligations imposed by
or under this Act.
( b ) Anything done or omitted to be done by a
representative acting as such shall for the purposes of
this Act be deemed to have been done or omitted to be
done by the person of whom he is a representative.
( c ) Any notice served on or any refund paid to a
representative in his capacity as such under any of the
provisions of this Act shall be deemed to have been
served on or to have been made to the person of whom
he is a representative.
( d ) The existence of or the designation of a person as a
representative of another person shall not relieve the
latter person from any obligation or liability under this
Act.
(4) A representative who has under his management or control
any funds or property belonging to or due to the person of whom he
is a representative shall not dispose of such funds or property
unless he has made adequate provision for any tax due under this
Act.
(5) A representative shall be jointly and severally liable with
the person of whom he is a representative for the tax due by that
person: provided that where the representative has acted in good
faith and is not knowingly in breach of subarticle (4) or of any
other obligation under this Act, his liability under this subarticle
shall be limited to the funds or to the value of any property under
his management or control which belongs or is due to the person of
whom he is a representative.
Appropriation of 
payment.
67. (1) Where any interest is due by a person on any tax, other
than tax that may be kept in abeyance in terms of the provisions of
the Ninth Schedule to this Act, any payment made by that person to
the Commissioner shall, notwithstanding any declaration made by
that person, be appropriated to that interest before it is appropriated
to any tax.
(2) Subject to the provisions of subarticle (1) when an
administrative penalty is due by a person, other than a penalty that
may be kept in abeyance in terms of the provisions of the Ninth
Schedule to this Act, any payment made by that person to the
Commissioner shall, notwithstanding any declaration of that person
to the contrary, be appropriated to such administrative penalty
before it is appropriated to any tax.
(3) Subject to the other provisions of this article, when tax due
by a person, other than tax that may be kept in abeyance in terms of
the provisions of the Ninth Schedule to this Act, became due on
more than one occasion any payment made by that person to the
Commissioner shall, notwithstanding any declaration of that person
to the contrary, be appropriated to that amount of tax that became
due at the earliest of those occasions before it is appropriated to the
VALUE ADDED TAX _g CAP. 406.  25
tax that became due on subsequent occasions.
Refunds.
circumstances provided for in article 26, 69, 70 or 71 or article
75( h ).
(2) When any amount is refundable by the Commissioner to a
person by whom any interest, administrative penalty or tax is due,
the Commissioner may deduct such tax, interest or administrative
penalty from that amount to the same extent to which that amount,
had it been a payment made by that person, would fall to be
appropriated to such interest, penalty or tax in accordance with the
provisions of article 67 and in the same order: provided that a
deduction under this subarticle may also be made with respect to
tax that may be kept in abeyance in terms of the provisions of the
Ninth Schedule to this Act.
(3) A refund due in accordance with any provision of this Act
shall be payable without any further appropriation other than this
Act by warrant under the hand of the Minister.
Repayment of tax 
that was paid but 
not due and of 
overpaid tax.
69. (1) Subject to the provisions of subarticle (2) where it
results that any tax paid by a person was not due or was in excess of
the tax due under this Act, the Commissioner shall, on the
production of such evidence as he may deem fit to require, repay
the tax or that part thereof which was not due to that person or to
any other person who may be entitled to that repayment: provided
that nothing in this subarticle shall be construed as overriding or
replacing the provisions of article 43.
(2) The Minister may by regulations prescribe the manner and
the time within which a claim for a repayment under subarticle (1)
may be made and such conditions and limitations, including a
minimum amount in respect of which a repayment may be claimed,
as he may deem fit.
(3) Where it results from a decision given on an appeal made in
accordance with this Act, that any amount of tax paid by a person
was not due, the Commissioner shall refund such amount to that
person within thirty days from the date such decision becomes  res
judicata.
(4) Interest at the rate specified in or prescribed in terms of
article 22(2) shall be due on a refund to which subarticle (3) refers
for the period ending on the date when the refund is paid or a
cheque or draft is posted by the Commissioner to the person to
whom the refund is payable, which interest shall run -
( a ) if and to the extent that the amount refundable had
been claimed as excess credit in a tax return furnished
to the Commissioner by the appellant, from the date
established in accordance with article 26;
( b ) if and to the extent that the amount refundable was
paid by the appellant as a condition for the validity of
his appeal in accordance with the provisions of the
Ninth Schedule to this Act, from the date on which that
amount was paid to the Commissioner;
  26  CAP. 406. _h    VALUE ADDED TAX 
( c ) in any other case, from the date the refund is payable
in accordance with subarticle (3).
International 
arrangements.
70. (1) If the Minister by order published in the Gazette
declares that arrangements have been made with the government of
any territory outside Malta with a view to affording relief from
double taxation in relation to tax payable under this Act and a
similar tax payable under the laws of that territory, and that it is
expedient that those arrangements should have effect, those
arrangements shall have effect notwithstanding anything in this
Act.
(2) If the Minister by order published in the Gazette declares
that arrangements have been made with the government of any
territory outside Malta with a view to granting a refund, on a
reciprocal basis, of any tax paid under this Act to persons
established outside Malta and that it is expedient that those
arrangements should have effect, those arrangements shall have
effect notwithstanding anything in this Act.
(3) Where it results that any tax has been paid on the
importation of goods which is exempt from import duties in terms
of diplomatic and consular arrangements having effect in virtue of
any enactment or that any tax has been paid on any supplies or
importations by a person who qualifies for an exemption from tax
in terms of such international arrangements as the Minister may, by
order in the Gazette, specify, the Commissioner shall, upon a
request made within such time and in such manner as may be
prescribed, and on the production of such evidence as he may deem
necessary, refund the tax so paid to the said person.
(4) The Minister may make regulations for the carrying out of
the provisions of any arrangements having effect under this article.
Repayments to 
non-residents.
71. The Minister may by regulations provide for the repayment
by the Government to non-residents an amount not exceeding the
tax chargeable on supplies made to such persons of goods exported
by those persons outside Malta, and may by such regulations
prescribe limitations to such repayments and to the persons who
may claim such repayments, the circumstances in which and the
conditions under which repayments may be claimed and the
procedures for repayments.
PART IX
Miscellaneous
Validity of notices, 
etc.
72. (1) Any notice, warrant or other proceeding purporting to
be made in accordance with the provisions of this Act shall not be
deemed to be void or voidable for want of form or be affected by
the reason of a mistake, defect or omission therein, if the same is in
substance and effect in conformity with or according to the intent
and meaning of this Act.
(2) In the case of a body of persons it shall be sufficient if only
the name of the body of persons appears on any notice, warrant or
proceeding, including any proceeding in the Court of Appeal,
VALUE ADDED TAX _g CAP. 406.  27
issued or made under or for the purposes of this Act.
Delivery and 
service of notices, 
etc.
73. (1) Every notice to be given by the Commissioner under
this Act shall be signed by the Commissioner or by some person or
persons authorised by the Commissioner and every such notice
shall be valid if the signature is printed, stamped or written thereon.
(2) Any notice required to be given under this Act by the
Commissioner or any other person may be served either personally
or by being sent by post. Unless the contrary is proved service of a
notice sent by post shall be proved by means of evidence that the
notice was properly addressed and posted and shall be deemed to
have been effected in the case of an address in Malta not later than
the third day following the day when it was posted, and in the case
of an address outside Malta the day succeeding that on which the
notice would have been received in the ordinary course by post:
Provided that a cheque or draft posted by the Commissioner shall
be deemed to be a payment for the amount thereof made on the date
it is posted.
(3) For the purposes of subarticle (2) a notice shall be deemed
to have been properly addressed if it has been addressed to a
person’s business or private address, and an address furnished by a
person to the Commissioner shall be deemed to be an address of
that person unless and until a notice of a change of address is given
by that person to the Commissioner.
(4) The Minister may by notice in the Gazette establish the
closing times for the offices of the Commissioner and any period
laid down in or under this Act for the furnishing, delivery or
service of a return, notice or other document to or on the
Commissioner or for any payment to the Commissioner shall be
deemed to expire at the closing time of the last day of that period.
Cap. 252.
(5) When the date on which any return, notice or other
document is to be furnished, delivered or served or deemed to be
served or on which a payment is to be made in terms of any
provision of this Act falls, were it not for the provisions of this
subarticle, on a Saturday or a Sunday, or on a national day or a
public holiday as established in the National Day and Other Public
Holidays Act, that date shall be deemed to fall on the first working
day, other than a Saturday, following the said Saturday, Sunday,
national day or public holiday.
Interest. 
Cap. 123.
Cap. 372.
74. For the purposes of the Income Tax Act and the Income
Tax Management Act - 
( a ) interest paid or payable under this Act by the
Commissioner to any person shall be treated as income
of that person;
( b ) interest paid or payable under this Act by any person
to the Commissioner shall be treated as expenses
incurred in the production of the income of that
person;
( c ) administrative penalties paid or payable under this Act
by any person to the Commissioner shall not be treated
  28  CAP. 406. _h    VALUE ADDED TAX 
as expenses incurred in the production of the income
of that person.
Power to make 
regulations.
75. The Minister may by regulations -
( a ) amend, cancel or substitute any of the Schedules,
except for the Ninth Schedule, to this Act;
( b ) prescribe any matter which may in any particular case
be deemed necessary for the purpose of avoiding
significant distortions in competition which might
otherwise result from the application of any of the
provisions of this Act;
( c ) make provision for the rounding up or down of any
amount in any computation made for any of the
purposes of this Act, or for disregarding any small
amounts in any such computation;
( d ) prescribe anything that may be prescribed in virtue of
the provisions of this Act;
( e ) prescribe any conditions and determination that may,
in accordance with this Act, be imposed or made by
the Commissioner;
( f ) prescribe any other matter for securing the payment of
the tax and generally for giving effect to the provisions
of this Act;
( g ) amend, revoke or substitute any regulations made
under this Act;
( h ) prescribe such refunds of tax paid under the Act to
such persons or classes of persons, subject to such
schemes and to such conditions and to such limitations
as may be prescribed in the said regulations.
PART X
Offences and Punishments
Failure to apply for 
registration, or to 
keep or deliver 
records and 
returns. 
76.  Any person who - 
( a ) fails to apply for registration at the time and in the
manner required by article 10;
( b ) fails to keep or to store records, documents and
accounts for the time and in the manner required by
this Act or any regulations made under this Act;
( c ) fails to furnish a tax return or any additional return,
statement or information or to produce any books,
records, documents and accounts, or fails to pay any
tax or administrative penalty due when required to do
so in virtue of this Act or of any regulations made
under this Act,
shall be guilty of an offence and shall, on conviction, be liable to a
fine ( multa )   of not less than one hundred liri and not exceeding
three hundred liri and, on a request by the prosecution, the court
shall order the offender to comply with the law within a time
VALUE ADDED TAX _g CAP. 406.  29
sufficient for the purpose, but in any case not exceeding three
months, and in default the offender shall be liable to the payment of
a further fine ( multa )   of not less than two liri   and not exceeding ten
liri   for every day that the default continues after the lapse of the
time fixed by the Court.
Irregularities in 
records, etc., and 
false 
representations.
77. Any person who -
( a ) knowingly fails to account for any taxable supply
made by him in the records, documents and accounts
required by this Act or any regulations made under this
Act;
( b ) gives any return, statement or information required for
any of the purposes of this Act which he knows to be
incorrect or misleading in any material respect;
( c ) falsifies any records, documents or accounts required
to be kept under this Act or prepares or draws up or
helps in the preparation or drawing up or makes use of
any false records or documents;
( d ) with the intent of concealing any evidence which he
knows or is reasonably expected to know to be
relevant for any purpose of this Act destroys, erases,
damages or conceals any stored information or any
records, documents or accounts;
( e ) fails to provide or produce a tax or other invoice or
document as and when required by article 50, 51 or 52
or provides any such tax or other invoice or document
which is incorrect or misleading in any material
respect;
( f ) provides an invoice or other document in respect of a
supply showing tax to be chargeable on that supply in
a case where he knows that no tax is chargeable or
where the tax chargeable is less than that shown or
otherwise knowingly adds to or includes in a price for
a supply any amount purporting to represent tax which
is not due or which is higher than the tax due;
( g ) applies to be classified for the purposes of this Act as
an exempt person in circumstances indicating that he
knows or could with due diligence have known that he
is not entitled to be so classified;
( h ) being classified as an exempt person for the purposes
of this Act and not being eligible to remain so
classified does not apply for the cancellation of that
classification in the manner required and within the
time laid down in this Act;
( i ) being classified as an exempt person for the purposes
of this Act purports in connection with any transaction
not to be so classified for the purpose of obtaining any
financial gain;
( j ) not being classified as an exempt person for the
purposes of this Act purports in connection with any
  30  CAP. 406. _h    VALUE ADDED TAX 
transaction to be so classified for the purpose of
obtaining any financial gain;
( k ) having added to or included in a price for goods or
services supplied by him to another person any amount
purporting to represent tax chargeable under this Act,
knowingly fails to account for that amount in his
records and accounts or to pay that amount to the
Commissioner;
( l ) acquires possession of or deals with any goods, or
accepts the supply of any services having reason to
believe that the tax on the supply of the said goods or
services has been or will be evaded;
( m ) supplies or offers to supply to another person goods or
services the acquisition or dealing with which or the
acceptance of which would render that other person
guilty of an offence in virtue of paragraph ( l ),
shall be guilty of an offence and shall, on conviction, be liable to a
fine ( multa )   of not less than one hundred and fifty liri and not
exceeding one thousand liri and, on a request by the prosecution, to
a further fine ( multa )   equal to ten times the endangered tax or to
imprisonment of not more than six months or to both such fines and
imprisonment.
Recurrent 
offences.
78. (1) Where a person has been convicted under either article
76 or article 77 and is again convicted of an offence under either of
the said articles committed within six months from the date of the
previous conviction, the fine ( multa ) shall in no case be less than
three hundred liri.
(2) Where a person has been convicted of four offences
committed under either of the articles aforesaid in a period of
twenty-four months, the court shall on the latest of the said
convictions and in addition to the punishment for that conviction
order the suspension for a determinate time of not less than one
week and not more than one month of all licences, permits,
warrants or other authorisation granted by the Police or by any
other authority to carry on the economic activity or activities to
which the offences relate.
Obstruction of 
officials. 
79. Any person who - 
( a ) obstructs, hinders, impedes or does anything which is
calculated to obstruct, hinder or impede, or molests or
assaults the Commissioner or any person duly engaged
in the exercise of any power or duty conferred or
imposed on him by or under this Act;
( b ) being a person in charge of any premises which the
Commissioner or any person authorised by the
Commissioner is empowered to enter in terms of
article 53( a ) fails to allow access to the said premises
to the Commissioner or authorised officer or fails to
take such measures as may be reasonably required of
him for the purpose of any such access or of any
VALUE ADDED TAX _g CAP. 406.  31
inspection of that premises or of any goods, assets,
books, records or documents kept therein,
shall be guilty of an offence and shall, on conviction, be liable to a
fine ( multa )   of not less than two hundred liri and not more than one
thousand liri, or to imprisonment of not more than six months, or to
both such fine and imprisonment.
Offences relating 
to importations. 
Cap. 37.
Cap. 9.
80. (1) The provisions of articles 18 and 62 of the Customs
Ordinance shall apply to this Act as if all references to duties
contained in those articles were references to tax due under this
Act, and any person who is in contravention of the provisions of the
said articles construed as aforesaid in relation to any goods whose
importation is subject to tax under this Act shall, without prejudice
to any liability incurred under the said Ordinance, be guilty of an
offence under this Act and shall on conviction, be liable to a fine
( multa )   equivalent to the aggregate of the amount of tax payable on
the goods and double the value of the goods, or to a fine ( multa )  of
twenty-five liri,   whichever shall be the greater, or to imprisonment
for a term not exceeding two years or to both such fine and
imprisonment and the offender may be either detained or proceeded
against by summons, in the same manner and form, and subject to
all other provisions laid down in the Criminal Code.
Cap. 37.
apply in relation to goods whose importation is subject to tax under
this Act as if any reference contained therein to the duty therein
mentioned were also a reference to the tax chargeable under this
Act.
(3) The importation of goods subject to tax under this Act
shall, for all purposes of any law, be deemed as a prohibited
importation unless the said tax is duly paid or, where the payment
of the tax has been postponed in accordance with any provisions of
this Act, the conditions imposed in connection with such a
postponement are duly observed.
General offence.
with any of the provisions of this Act or any regulations made
under this Act shall be guilty of an offence and shall on conviction,
unless the offence is subject to a greater punishment under any
other provision of this Act or any other law, be liable to a fine
( multa )   of not less than one hundred liri   but not exceeding five
hundred liri, or to imprisonment for a term not exceeding three
months, or to both such fine and imprisonment.
Offences by 
principal officers 
of bodies of 
persons and by 
employers.
82. (1) Where any thing is done or omitted to be done by a
body of persons, the provisions of this Part shall apply as if such
thing were done or omitted to be done by every director, manager
or other principal officer of that body of persons: provided that a
director, manager or other principal officer of a body of persons
shall not be guilty of an offence in virtue of this subarticle if he
proves that he was unaware and could not with reasonable diligence
be aware of such act or omission and that he did everything within
his power to prevent that act or omission.
(2) Where anything is done or omitted to be done by an
  32  CAP. 406. _h    VALUE ADDED TAX 
employee in the course of his employment, or by any person acting
on behalf of the registered person, whether such other person is an
employee or not, the provisions of this Part shall apply as if such
thing were done or omitted to be done both by the said employee or
other person and by the employer or registered person: provided
that such an employer or registered person shall not be guilty of an
offence in virtue of this subarticle if he proves that he was unaware
and could not with reasonable diligence be aware of such an act or
omission and that he did everything within his power to prevent
that act or omission.
Prosecution.  83. (1) No proceedings under this Part shall be taken except at
the instance or with the sanction of the Commissioner, and
proceedings that have been so taken may, at any time before final
judgment, be withdrawn at the request of the Commissioner.
Cap. 9. (2) Notwithstanding the provisions of the Criminal Code, the
Attorney General shall have a right of appeal to the Court of
Criminal Appeal from any judgment given by the Court of
Magistrates in respect of criminal proceedings under this Part.
(3) The institution of proceedings or the imposition of a
penalty for any offence under this Part shall not relieve any person
from prosecution under any other law or from liability to the
payment of any tax or administrative penalty for which he is or may
be liable under this Act, and the institution of proceedings or the
imposition of a penalty for any offence under any other law or the
payment of any tax or administrative penalty under this Act shall
not relieve any person from any prosecution or penalty under this
Part.
Cap. 9.
Cap. 446.
(4) Article 21 of the Criminal Code and the Probation Act shall
not apply with respect to any conviction under this Act.
(5) In any criminal proceedings under this Part the
Commissioner personally or any other officer designated by him
may, notwithstanding the provisions of any other law, produce the
evidence, plead and otherwise conduct the prosecution instead of or
jointly with the police.
(6) Should the evidence of the Commissioner or of the officer
designated by him as aforesaid be required as part of the case for
the prosecution, he shall be heard before assuming the duties of a
prosecuting officer unless the necessity of his giving evidence
arises at a later stage: provided that the Commissioner or other
officer as aforesaid may state the facts constituting the offence
before giving evidence.
Compromise 
penalty. 
84. (1) Notwithstanding any other provisions of this Act, the
Commissioner may, in the case of an offence under this Act, enter
into an agreement in writing with the offender whereby the said
offender pays a sum equivalent to the fine ( multa )   that may be
imposed by way of penalty in accordance with this Act on the
conviction of that person for the said offence, sohowever that
where a minimum and a maximum amount is provided for in
respect of the fine ( multa )   that may be so imposed, the sum payable
pursuant to the said agreement shall be a sum equivalent to the said
VALUE ADDED TAX _g CAP. 406.  33
minimum amount increased by one half of the difference between
the said minimum and maximum amounts, and upon the signing of
any such agreement by the Commissioner and the offender all
criminal liability of the offender under this Act with regard to the
offences in relation to which the agreement has been entered shall
be extinguished.
(2) The provisions of subarticle (1) shall apply also in any case
where the offender has been charged before a court in relation to
the offence but before final judgment has been given in the case:
Provided that where proceedings before a court have not
been commenced, the sum payable in accordance with any
agreement as contemplated in subarticle (1) shall be reduced by ten
per cent.
(3) Notwithstanding the provisions of subarticle (1) and
subarticle (2) the Commissioner may in the case of an offence by
any person against the provisions of article 77( e ), enter into an
agreement with the offender, whereby the said offender pays to the
Commissioner a fine ( multa )   of fifty liri   in the case of a first
offence, one hundred liri   in the case of a second offence and two
hundred liri in the case of a third offence, within seven days from
the receipt of a notice by the Commissioner to this effect, and upon
the payment of such fine ( multa ), all criminal liability under this
Act with regard to the offences in relation to which the fine ( multa )
has been paid, shall be extinguished.
(4) Any sum due in virtue of an agreement entered into in terms
of subarticle (1) or subarticle (3) shall be due to the Government as
a civil debt. The Commissioner shall not enter into an agreement as
is referred to in subarticle (1) or subarticle (3) unless such
agreement is accompanied b the payment of the sum due or a
sufficient security for its payment. 
(5) The provisions of this article shall be without prejudice to
any proceedings or forfeiture instituted or having effect in virtue of
any other law.
(6) The said agreement and the payment of the fine ( multa )   so
imposed shall be without prejudice to any tax, interest and
administrative penalty due under this Act.
PART XI
Transitory Provisions
Saving. 
Cap. 395.
85. * (1) The provisions of the Customs and Excise Tax Act †
shall continue to apply fully with respect to any importation and
any provision of services and supply of goods made before the
effective date and with respect to anything required to be done or
not to be done under that Act before the effective date subject to the
provisions of the other articles of this Part.
Cap. 341.
*The original subarticle (1) has been omitted under the Statute Law Revision Act,
1980.
†Repealed by this Act.
  34  CAP. 406. _h    VALUE ADDED TAX 
Value Added Tax Act, 1994, *  shall continue to apply to the extent
that they were applicable immediately before the effective date.
Cap. 395.
Cap. 337.
Cap. 336.
(3) Notwithstanding the repeal of the Customs and Excise Tax
Act † , the amendments made to the Import Duties Act by article
77(1)( a ) of the Customs and Excise Tax Act † , shall continue to
apply notwithstanding that the goods therein referred to shall no
longer be liable to excise tax under that Act and the minimum rate
of 8.1 per cent shall continue to apply in respect of goods which on
the 1st July, 1997 were not subject to a levy under the Local
Manufactures (Promotion) Act.
Returns and 
payments of tax in 
terms of the 
Customs and 
Excise Tax Act.
Cap. 395.
86. (1) For the purposes of the Customs and Excise Tax Act † ,
the last tax period of every person to whom article 31 of that Act
applied immediately before the effective date shall be deemed to
end on the day immediately preceding the effective date.
(3) The tax return and the payment shall be made
notwithstanding any exemption under this Act and in addition to
any obligation to furnish tax returns and to effect payments of tax
under this Act.
Registration, 
classification and 
tax period of 
persons registered 
under the Customs 
Excise Tax Act.
Cap. 395.
87. Notwithstanding the other provisions of this Act - 
( a ) Every person who was on the date immediately
preceding the effective date a registered person for the
purposes of the Customs and Excise Tax Act † , shall be
deemed to have applied for registration and to have
been registered on the effective date for the purposes
of and in accordance with this Act.
Cap. 395.
( b ) Unless the Commissioner otherwise directs in any
particular case or cases, the tax period that applied for
the purposes of the Customs and Excise Tax Act † ,
immediately before the effective date with respect to
any person to whom paragraph ( a ) applies shall be
deemed to be the tax period allocated to him by the
Commissioner for the purposes of and in accordance
with this Act: provided that the first tax period under
this Act of every such person shall commence on the
effective date.
Time and taxable 
value of certain 
supplies.
Cap. 395.
88. (1) When any of the dates which are relevant for
determining the date of a supply of goods or services, other than
services to which article 8(4) refers, in accordance with subarticles
(1), (2) and (3) of the said article is a date preceding the effective
date, the date of that supply shall for the purposes of this Act and of
the Customs and Excise Tax Act † , be determined in accordance
with subarticle (1) and without any reference to subarticles (2) and
(3) of the said article.
(2) Where a payment is received or an invoice is issued for
services to which article 8(4) refers, and that payment or invoice
refers to a period which commences before the effective date and
ends on or after that date the following provisions shall apply - 
*Repealed by Act XII of 1997  ( Cap. 395 ) .
†Repealed by this Act.
VALUE ADDED TAX _g CAP. 406.  35
( a ) that period shall be divided for the purposes of this
subarticle into two periods the first of which ends on
the date immediately preceding the effective date and
the second of which commences on the effective date
and the value of that payment or invoice shall be
apportioned accordingly;
Cap. 395.
( b ) if the service in question is a taxable service within the
meaning of the provisions of the Customs and Excise
Tax Act * , the value attributable to the first period shall
be deemed for the purposes of that Act and of this Act
to be the taxable value of a taxable supply of services
made before the effective date;
Cap. 395.
( c ) if the service in question is a taxable supply within the
meaning of this Act the value attributable to the
second period shall be deemed for the purposes of this
Act and of the Customs and Excise Tax Act * , to be the
taxable value of a taxable supply made on or after the
effective date.
Cap. 337.
Cap. 395.
(3) Where any goods are imported into Malta before the first
January, 1999 and the time at which import duty is to be computed
in terms of the Import Duties Act or, where no such import duty is
payable, the time at which it would be so computed had it been
payable, falls on or after the said date, the said importation shall be
deemed, both for the purpose of this Act and for the purpose of the
Customs and Excise Tax Act * , to have taken place on the said date.
Interpretations of 
certain contracts.
Cap. 395.
89. Where, in the execution of a contract made before the
effective date, any goods or services are supplied on or after that
date and that supply is a taxable supply, that contract shall, for all
the purposes of any law be interpreted as if the parties to that
contract had agreed to a change in the consideration stipulated
therein to reflect the difference, if any, between the system under
the Customs and Excise Tax Act *  and that applicable under this
Act:
Provided that this article shall not apply -
( a ) where it results from the contract and from all the
relevant circumstances that the consideration
determined in accordance with that contract had
already made provisions for the said adjustment or that
the parties had excluded any adjustment to the
consideration on account of the said difference;
( b ) where or to the extent that the supply was, in terms of
the said contract, due to take place before the effective
date and the delay was due to a fault on the part of the
person who makes that supply.
Refund of excise 
tax on imports of 
goods in stock.
Cap. 395.
90. (1) The Minister may by regulations prescribe that a
payment shall be made to registered persons corresponding to the
value or estimated value or part thereof of excise tax on goods
charged and paid and not refunded or otherwise refundable under
the provisions of the Customs and Excise Tax Act * .
  36  CAP. 406. _h    VALUE ADDED TAX 
(2) No such payment shall be due to registered persons who are
classified as exempt persons or who are so classified within a
period of six months from the effective date and to persons that do
not satisfy and comply with the conditions that may be prescribed
in the said regulations.
(3) The payment shall be made over such period and in such
manner as may be prescribed.
*Repealed by this Act.
VALUE ADDED TAX _g CAP. 406.  37
 
The activities listed in the second column of the public authorities listed in the
first column of this Schedule shall be deemed to be activities performed in the course
or furtherance of an economic activity.
FIRST SCHEDULE Amended by:L.N. 198 of 1999;
L.N. 387 of 2002.
Activities of Public Authorities
First column 
Public authority
Second column
Activities
Armed Forces of Malta Private hire of patrol boat, helicopter and
equipment
Inspection of ships’ hulls by divers
Security duties with banks and similar
activities
Central Bank of Malta Production and sale of numismatic coins and
medals
Civil Aviation Department Provision of meteorological services
Correctional Services Department Book binding
Sale of bread
Customs Department  Sale of impounded motor vehicles
Department of Education  The provision of accommodation for visiting
youths and students
Department of Health Hospitalisation and treatment of foreign
patients
Pathological and radiological investigations
Sale of drugs and vaccines
Hire of ambulances
Sale and cleaning of grave sites
Department of Industry Laboratory analysis
Testing for standards and issuing of
certificates for exported goods
Giving technical advice in connection with
technical problems to private industries
Department of Information Printing services to government departments
and parastatal entities 
Sale of Gazette and other publications
Enemalta Corporation Sale of leaded petrol, unleaded petrol, diesel
(gas) oil, bottled gas and supply of electricity
Malta Drydocks Corporation All activities
Mediterranean Conference Centre All activities
  38  CAP. 406. _h    VALUE ADDED TAX 
Ministry of Food, Agriculture and
Fisheries 
Quarantine services
Sale of milk powder, eggs and dairy produce
Sale of vegetables
Sale of livestock
Sale of decorative trees, fruit trees, vine
rootings, fruit plants, shrubs and flowers
Sale of wheat, straw and manure
Sale of fish and fishing equipment
Bowser water services
Services of grafting, pruning and spraying
Rent and provision of cold storage facilities
and sale of ice
Services of civil abattoir
Ministry of Home Affairs Provision of residential and nursing care
Provision of telephonic communications
Ministry for the Environment  Acting as contractor for cleaning services 
Sale of compost 
Sale of tender documents 
Repairs to damage
Carpentry works
Hiring of plant and vehicles 
Supply of metal trades goods 
Repairs to plant and vehicles 
Sale of prints
Ministry of Tourism  Sale of prepared food prepared by students as
part of their daily training
The provision of accommodation facilities to
student groups and to individuals
VALUE ADDED TAX _g CAP. 406.  39
SECOND SCHEDULE
_gArticle 6_h
Supplies of Goods and Services
Exchange
1. In a contract of exchange each of the parties shall be deemed to make a
supply of any goods and any services he transfers or provides pursuant to that
contract.
Delivery on deferred terms
2. The delivery of the possession of goods pursuant to an agreement for the
sale of those goods on deferred terms shall be treated as a supply of those goods.
Hire purchase
3. The delivery of the possession of goods pursuant to an agreement for the
hire of those goods for a certain period which expressly contemplates that the
ownership of those goods will be transferred at a time not later than the date on
which an agreed price has been paid in full shall be treated as a supply of those
goods.
Free supplies
4. (1) The transfer or disposal by a person of assets belonging to his
economic activity for no consideration including the transfer or disposal of such
assets by that person to himself shall be treated as a supply of those assets made for
a consideration in the course or furtherance of that economic activity.
(2) The taxable value of a supply to which paragraph (1) of this item
applies shall be the price which would be payable by that person if he were to
purchase at the time of that supply goods identical or similar to the goods in
question, or, where the value cannot be so ascertained, the cost of producing the
goods in question at the said time.
(3) Paragraph (1) of this item does not apply to -
( a ) a gift of goods made in the course or furtherance of that activity,
otherwise than as one forming part of a series of gifts made to the same
person, where the cost to the donor is not more than twenty liri ;
( b ) a gift of an industrial sample in a form not ordinarily available for sale
to the public;
( c ) a transfer or disposal of an asset that had been acquired as a fixed asset
in the same state saving only wear and tear by a person when it results
from the records of the economic activity of that person that he had not
qualified for and had not claimed any input tax credit under the
provisions of this Act or of the Value Added Tax Act, 1994, or any
refund under the provisions of the Customs and Excise Tax Act *  with
respect to the acquisition of that asset.
*Repealed by this Act.
  40  CAP. 406. _h    VALUE ADDED TAX 
Private use
5. When assets belonging to an economic activity carried on by a person are
used by (but not transferred to) that person himself or any other person for any
purpose other than for the purpose of that economic activity, whether or not a
consideration is paid or payable, the person carrying on that activity shall be treated
as having made a supply of services for a consideration in the course or furtherance
of that activity. The taxable value of that supply shall be the full cost to that person
of providing those services.
Supply for a consideration of assets belonging to an economic activity
6. The transfer or disposal by a person of assets belonging to his economic
activity for a consideration including:
( a ) the transfer or disposal of such assets by a person to himself;
( b ) the sale by judicial auction pursuant to any proceedings exercised by a
creditor or by creditors of that person;
( c ) the transfer of such assets by order made by or in the name of a public
authority or in pursuance of the law against payment of compensation,
shall be treated as a supply of those assets in the course or furtherance of that
economic activity:
Provided that where it results from the records of that economic activity that
that person had acquired that asset as a fixed asset in the same state saving wear and
tear and had not qualified for and had not claimed any input tax credit under the
provisions of this Act or of the Value Added Tax Act, 1994 or any refund under the
Customs and Excise Tax Act *  with respect to that acquisition the taxable value of
that supply shall be limited to the excess, if any, of that consideration over the cost
at which that asset had been acquired.
Judicial auction
7. (1) Where any assets belonging to an economic activity of a person are
sold by judicial auction pursuant to any proceedings exercised by a creditor or by
creditors of that person the Registrar of the court under the authority of which the
sale is made shall, after notifying the person or persons appearing to be interested
therein, remit to the Commissioner from the proceeds lodged in court, with
preference over any other person not having a prior claim to that of the
Commissioner as provided for in article 62 of the Act, the tax chargeable, if any, on
the supply deemed to have been made in terms of item 6 of this Schedule.
(2) Any interested person may oppose the remittance referred to in
paragraph (1) of this item by means of writ of summons filed against the
Commissioner within six working days from the date of the notification referred to
in the said paragraph.
(3) No bid  animo compensandi  shall be approved for the purposes of
article 331 of the Code of Organization and Civil Procedure unless the tax
chargeable, if any, on that supply has been lodged in court and remitted by the
Registrar in accordance with paragraph (1) of this item.
Cessation of business and classification as exempt person
8. Saving the provisions of article 12(3) and of article 13(3), when the
VALUE ADDED TAX _g CAP. 406.  41
registration of a person who is not an exempt person is cancelled or when a
registered person is classified as an exempt person other than on the date of his
registration under this Act he shall be deemed to have, immediately before such
cancellation, made a supply of all the assets that belonged to his economic activity at
that time and items 4 and 5 of this Schedule shall apply.
Transfer of going concern
9. (1) The transfer by a person of assets of his economic activity shall be
treated as neither a supply of goods nor a supply of services if -
( a ) the assets are supplied to a registered person to whom he transfers his
economic activity, or a part of that activity which is capable of separate
operation, as a going concern, and
( b ) the said assets are to be used by the transferee in carrying on the same
kind of activity, whether or not as part of an existing economic activity,
as that carried on by the transferor, and
( c ) the said transfer is recorded in the records of the transferor indicating
the registration number of the transferee.
(2) The provisions of items 4 and 6 of this Schedule shall apply subject to
the provisions of this item.
Suppliers by independent agents
10. When goods or services are supplied through an agent who acts in his own
name that supply shall be treated as both a supply to that agent and a supply by that
agent.
Supplies by intermediaries
11. When a supply is made through an intermediary who acts in the name and
for the account of another person and to the extent that the Commissioner is satisfied
that the supply is made as aforesaid, that supply shall be treated as a supply made by
that other person.
Contract of works
12. The delivery of goods pursuant to a contract of works, other than a
construction contract, whether or not the materials have been provided in full or in
part by the customer, shall be treated as a supply of those goods.
Rights over property
13. (1) The transfer of an asset which is immovable property by definition of
the law shall be treated as a supply of goods: provided that an emphyteutical grant
for a period not exceeding fifty years shall be treated as a supply of a service.
(2) Subject to the provisions of paragraph (1) of this item an assignment
of any rights over property or of any intangible property whether or not it is the
subject of a document establishing title is a supply of services.
Obligation to refrain from an act or to tolerate an act
14. An obligation to refrain from an act or to tolerate an act or situation is a
  42  CAP. 406. _h    VALUE ADDED TAX 
supply of services.
Incidental supplies
15. (1) The provision by a person of goods for the purpose and in the course
of maintenance or repair services supplied by that person shall be treated as part of
the supply of those services.
(2) Save as otherwise provided in the Act or any regulations, including
these regulations, made under the Act, where a supply includes the provision of both
goods and services and the consideration for that supply does not distinguish
between the consideration for the goods and the consideration for the services, the
supply shall be treated as a supply of goods or as a supply of services according to
the principal nature of that supply.
VALUE ADDED TAX _g CAP. 406.  43
THIRD SCHEDULE
_gArticle 7_h
Place of Supply of Services
General rule
1. Except as otherwise provided in this Schedule a supply of services shall be
treated as made in the country where the person who makes the supply is established.
Services relating to immovable property
2. A supply of services in connection with immovable property, including the
services of an architect, an estate agent or expert, a valuer or an appraiser,
construction works and on site supervision of construction works shall be deemed to
be made in the country where the immovable property is situated.
Transport
3. A supply of transport services shall be deemed to be made in the place where
the journey commences.
Services supplied where physically carried out
4. A supply of services listed in this item shall be deemed to be made in the
country where the activities are physically carried out:
( a ) cultural, artistic, sporting, scientific, educational and entertainment
activities, the activities of promoters and organisers of the said
activities, and activities ancillary thereto;
( b ) activities ancillary to transport, such as loading, unloading and
handling;
( c ) valuation of tangible movable property;
( d ) work on movable tangible property.
Letting of movables
5. A supply of services consisting in the letting of movable tangible property,
with the exception of all forms of transport, shall be deemed to be made in the
country where the property is used by the lessee.
Services supplied where customer is established
6. The supply of the services listed in this paragraph shall be deemed to be
made in the country where the customer to whom or for whom the services are
supplied is established:
( a ) the transfer or assignment of a copyright, patent, trademark, tradename
or licence or of any right thereon;
( b ) advertising services;
( c ) services of consultants, engineers, consultancy bureaus, advocates,
legal procurators, accountants, auditors, financial advisers, data
processing and the supply of information;
  44  CAP. 406. _h    VALUE ADDED TAX 
( d ) obligations to refrain from pursuing or exercising in whole or in part
any economic activity;
( e ) banking, financial, insurance and re-insurance transactions, excluding
the letting of a place for the safe deposit of any goods or documents;
( f ) the supply of staff;
( g ) the services of an agent who acts in the name and for the account of
another, when he procures for his principal any of the services referred
to in this item.
VALUE ADDED TAX _g CAP. 406.  45
Exports
l. (1) The supply of goods which consists of the export of those goods by the
supplier.
(2) The supply of goods to a taxable person established in Malta who
carries on the business of arranging or financing the export of goods, for the purpose
of the export of those goods by that person without the actual delivery of those goods
to that person, provided the goods are actually exported without any processing or
alterations and subject to such conditions, evidence or security as may be imposed or
required by the Commissioner.
Services connected with exports and importations
2. (1) The supply of services in procuring for a taxable person the export of
goods from Malta or the supply of goods or services outside Malta.
(2) The supply of services to a person established outside Malta consisting
of work on tangible movable property imported for the purpose of undergoing such
work in Malta and exported out of Malta by the person who supplied those services
or by his customer.
(3) The supply of services to a person established outside Malta in
procuring the importation of goods into Malta.
Goods in bond, supplies by duty free shops and Freeport activities
3. (1) A sale of goods which takes place while the goods are in a customs
bond and which is entered by the Comptroller of Customs pursuant to article 36 of
the Customs Ordinance or any provision amending or replacing the said article.
(2) The supply of goods and services by an operator of a duty free shop
pursuant to and in accordance with a licence issued under the Duty Free Shop
Regulations, 1991 (L.N. 177 of 1991).
(3) A supply by a company of goods or services which takes place within
a Freeport zone as defined in the Malta Freeports Act where the said supply
constitutes an activity which the said company is licensed to carry on in terms of the
said Act.
FOURTH SCHEDULE
_gArticle 9(1)_h
Exempt Supplies
PART ONE
Exemptions with Credit
Amended by:
L.N. 17 of 1999;
L.N. 28 of 1999;
L.N. 89 of 1999;
L.N. 116 of 1999;
L.N. 142 of 1999;
L.N. 199 of 1999;
L.N. 11 of 2000;
L.N. 274 of 2000;
L.N. 23 of 2001;
L.N. 171 of 2001;
L.N. 233 of 2001;
L.N. 180 of 2002;
L.N. 205 of 2002;
L.N. 39 of 2003.
  46  CAP. 406. _h    VALUE ADDED TAX 
International transport
4. The supply of services consisting in international transport of goods and
passengers and of services directly related thereto.
Provisioning and fuelling of ships and aircraft
5. (1) The supply of goods for the fuelling and provisioning of vessels used
for navigation on the high seas for the purpose of commercial, industrial or fishing
activities, of vessels used for rescue or assistance at sea, and of aircraft used by
airlines operating for reward in international traffic.
(2) The supply of fuel to vessels for the purpose of inshore fishing.
Supply, repairs, etc., of ships and aircraft
6. (1) The supply, repair, modification, chartering and hiring of vessels or
aircraft referred to in item 6 of this Schedule, and the supply, hiring, repair and
maintenance of equipment, including fishing equipment, incorporated or used
therein.
(2) The supply of services, other than those referred to in paragraph (1) of
this item, to meet the direct needs of the vessels and aircraft referred to in the said
paragraph or of their cargoes.
Food
7. The supply of any food, as defined in Part Three of this Schedule, excluding
food supplied in the course of catering as defined in that Part.
Pharmaceutical goods
8. The supply of pharmaceutical goods, as defined in Part Three of this
Schedule.
Services by band clubs
9. The supply of services consisting in public performances by a philharmonic
society which the Commissioner is satisfied constitutes a  bona fide  band club.
Transport 
10. The supply of -
( a ) transport supplied by the scheduled bus service consisting of scheduled
trips on scheduled routes;
( b ) scheduled inter-island sea trips supplied by authorised carriers, and
other scheduled sea transport services recognised as such by the
Commissioner;
( c ) school transport supplied by an educational establishment recognised as
such by the Commissioner or supplied to any such establishment for the
purpose of being provided by it as school transport and school transport
organised or supplied by a central office;
( d ) transport supplied or organised by an employer or by a central office to
VALUE ADDED TAX _g CAP. 406.  47
transport the employees to and from their place of work and recognised
as such by the Commissioner.
In paragraphs ( c ) and ( d ) of this item "central office" has the meaning
assigned to it in Legal Notice No. 144 of 1991.
Supply of gold
11. The supply of gold to the Central Bank of Malta.
Printed Matter and other articles
12. (1) The supply of books, newspapers, other printed matter and other
articles falling within the definition of "Printed matter and other articles" contained
in Part Three of this Schedule.
(2) The supply of electronic, magnetic, optic or any other machine
readable media of any information which, in printed form, would have the
characteristics of books, newspapers and any other printed matter falling within the
definition of "Printed matter and other articles" contained in Part Three of this
Schedule.
PART TWO
Exemptions Without Credit
Immovable property
1. (1) The letting of immovable property excluding -
( a ) the letting of or the provision of accommodation in any premises which
for the purpose of the said letting or accommodation is required to be
licensed in virtue of the Hotels and Catering Establishments Act or of
the Guest Houses and Holiday Furnished Premises Act or in a holiday
camp or camping site;
( b ) the letting of premises and sites for parking vehicles where such
premises or sites have been designated by the Commissioner as parking
areas or which fall to be treated as such in terms of such regulations as
may be prescribed;
( c ) the letting of permanently installed equipment and machinery;
( d ) the letting of property by a limited liability company to a registered
person for the purpose of the economic activity of that other person.
(2)  The transfer of immovable property.
(3) For the purposes of this item "immovable property" and "letting of
immovable property" have the meaning assigned to them in Part Three of this
Schedule.
Insurance services
2. The supply by persons licensed under the Insurance Business Act or the
  48  CAP. 406. _h    VALUE ADDED TAX 
Insurance Brokers and Other Intermediaries Act, of services in respect of which they
are so licensed.
Credit, banking and other services
3. (1) The granting and the negotiation of credit and the management of
credit by the person granting it.
(2) The negotiation of or any dealings in credit guarantees or any other
security for money and the management of credit guarantees by the person who is
granting the credit.
(3) Transactions, including negotiation, concerning deposit and current
accounts, payments, transfers, debts, cheques and other negotiable instruments, but
excluding debt collection and factoring.
(4) Transactions, including negotiation, concerning currency, bank notes
and coins normally used as legal tender.
(5) Transactions, including negotiation, excluding management and
safekeeping, in shares, interest in companies or associations, debentures and other
securities, excluding documents establishing title to goods.
(6) The supply of any services consisting of the management or
arrangement of any scheme as specified in the First Schedule to the Investment
Services Act, by a person duly authorised by a licence issued under that Act.
Culture and religious services
4. (1) Religious services.
(2) The supply of such cultural services as may be approved by the
Minister.
Sports
5. The supply by non-profit making organisations of such services related to
sport or physical recreation as may be approved by the Minister.
Services related to certain exempt services
6. (1) The supply of staff by a non-profit making institution which is
recognised as such by the Commissioner for the purpose of providing services
referred to in paragraph (2) or (4) of item 10 or in paragraph (1) or (2) of item 11 of
this Part.
(2) The supply of goods and services by a non-profit making organisation
in the course of an activity designed to raise funds to be used for the provision of
goods and services which are exempt in terms of paragraph (2) or (4) of item 10 or of
paragraph (1) or (2) of item 11 of this Part: provided the activity is recognised by the
Commissioner as being exclusively designed for the said purpose.
Services by non-profit making organisations to their members
7. The supply of services for the benefit of their members in return for a
subscription fixed in accordance with their rules by non-profit making organisations
with aims of a political, trade union, religious, patriotic, philosophical, philanthropic
or civic nature or whose main purpose is to represent and promote the common
VALUE ADDED TAX _g CAP. 406.  49
business or professional interests of their members: provided that in any case where,
in the opinion of the Minister, this exemption is likely to cause distortion of
competition, this exemption shall be subject to such exceptions or limitations as the
Minister may by order in writing determine.
Lotteries
8. Government lotto and lotteries, the supply of agency services related
thereto, and such other supplies related to gambling as may be approved by the
Minister.
Postal Services
9. The supply of public postal services and of goods incidental thereto.
Health and Welfare
10. (1) The supply of services by a person in the exercise of any profession
regulated b the Medical and Kindred Professions Ordinance.
(2) The provision of care or medical or surgical treatment in any
government hospital or institution or in any other hospital or institution approved by
the Minister for the purposes of this paragraph.
(3) The supply of human organs, blood and milk.
(4) The supply of welfare services, including services supplied by homes
for the elderly, and services for the protection and care of children and young
people, supplied by any government institution or by any institution or organisation
recognised by the Commissioner as a non-profit making institution or approved by
the Minister for the purpose of this paragraph as any institution whose activities fall
within the social and welfare policy of the government.
(5) The supply of transport services for sick, injured or disabled persons
in vehicles specially designed for that purpose.
(6) The supply of goods where the said supply is connected with and
essential for the supply of services referred to in paragraphs (2) and (4) of this item
by the hospital, institution or home, as the case may be, supplying the said services.
Education
11. (1) The provision of education or educational research, including distance
learning, by a government school or institution, by the University of Malta, by a
school or institution registered under the Education Act, or by any educational
establishment recognised as such by the Commissioner.
(2) The provision of education or educational research, including distance
learning, of a kind provided by a school or university, or of religious instruction, by
a non-profit making institution recognised as such by the Commissioner.
(3) Tuition given privately by teachers acting in an independent capacity
in subjects which are normally taught in the course of education provided by a
school or university but excluding tuition in recreational, physical or sporting
activities or disciplines.
  50  CAP. 406. _h    VALUE ADDED TAX 
PART THREE
Definitions of terms used in this Schedule
For the purposes of this Schedule, the following terms shall have the
meaning assigned to them in this Part.
Food
1. "Food" means the goods specified in the Customs Tariff contained in the
First Schedule to the Import Duties Act under:
(i) Chapter 1 but excluding items falling under subheadings
0101.10.10.00;  0101.90.19.10; 0105.11.11.10; 0105.11.19.10;
0105.11.91.10; 0105.11.99.10; 0105.12.00.10; 0105.19.20.10;
0105.19.90.10; 0105.92.00.10; 0105.93.00.10; 0105.99.10.10;
0105.99.20.10;  0105.99.30.10;  0105.99.50.10; 0106.11.00.00;
0106.12.00.00;  0106.19.90.00;  0106.20.00.00; 0106.31.00.00;
0106.32.00.00;  0106.39.10.90;  0106.39.90.00; 0106.90.00.00.
(ii) Chapters 2 to 4 inclusive, but excluding items falling under
subheadings 0301.10.10.00 and 0301.10.90.00 in Chapter 3. 
(iii)  Items falling under subheadings
0504.00.00.00; 0505.90.00.10; 0506.90.00.10; 0508.00.00.10; 
0510.00.00.10; 0511.10.00.00; 0511.91.10.00; 0511.91.90.10;
0511.99.90.00 in Chapter 5.
(iv)  Items falling under subheadings
0601.20.10.00; 0602.10.10.00; 0602.20.10.00; 0602.20.90.00;
0602.90.10.00;  0602.90.20.00; 0602.90.30.00 in Chapter 6.
(v) Chapters 7to 12 inclusive, but excluding items falling under
subheadings1209.30.00.00;1209.99.91.00;1209.99.99.00 in
Chapter 12. 
(vi) Chapter 13 excluding items falling under subheading
1301.10.00.00.
(vii) Chapters 15 to 20 inclusive, but excluding items falling under
subheadings
1501.00.11.00; 1502.00.10.00; 1503.00.11.00; 1503.00.30.00;
1505.00.10.00; 1505.00.90.00;  1507.10.10.00; 1507.90.10.00;
1508.10.10.00; 1508.90.10.00; 1511.10.10.00; 1511.90.91.00;
1512.11.10.00; 1512.19.10.00; 1512.21.10.00; 1512.29.10.00;
1513.11.10.00;  1513.19.30.00; 1513.21.11.00; 1513.21.19.00;
1513.29.30.00; 1514.11.10.00; 1514.19.10.00; 1514.91.10.00;
1514.99.10.00; 1515.11.00.00; 1515.19.10.00; 1515.21.10.00;
1515.29.10.00; 1515.30.10.00; 1515.30.90.00; 1515.40.00.00;
1515.50.11.00; 1515.50.91.00; 1515.90.15.00; 1515.90.15.20;
1515.90.15.90; 1515.90.21.00; 1515.90.31.00;  1515.90.40.00;
1515.90.60.00; 1516.20.10.00; 1518.00.10.00; 1518.00.31.00;
1518.00.39.00; 1518.00.91.00; 1518.00.95.00; 1518.00.99.00;
1521.10.10.00; 1521.10.90.00; 1521.90.10.00; 1522.00.31.00;
1522.00.39.00;  1522.00.91.00 in Chapter 15.
(viii) Chapter 21 but excluding items falling under subheadings
2105.00.10.11;  2105.00.10.90; 2105.00.91.11; 2105.00.91.90;
2105.00.99.11;  2105.00.99.90; 2106.90.20.41; 2106.90.20.47;
VALUE ADDED TAX _g CAP. 406.  51
2106.90.20.49  2106.90.20.92; 2106.90.20.95; 2106.90.20.98;
2106.90.98.42;  2106.90.98.46; 2106.90.98.49.
(ix) Subheadings
2202.90.10.11; 2202.90.10.31; 2202.90.10.39; 2202.90.10.91;
2202.90.10.92; 2202.90.10.99; 2202.90.91.11; 2202.90.95.11;
2202.90.99.11; 2202.90.99.40; 2209.00.11.00; 2209.00.19.00;
2209.00.91.00; 2209.00.99.00 in Chapter 22.
(x) Chapter 23.
(xi) Subheadings
2501.00.10.00 and 2501.00.91.00 in Chapter 25.
(xii) Subheadings
3301.90.21.00; 3302.10.21.00; 3302.10.29.91; 3302.10.29.93;
3302.10.40.00; 3302.10.90.00
in Chapter 33.
Food supplied in the course of catering
2. (1) "Food supplied in the course of catering" means food which is suitable
for immediate consumption, whether such food is consumed in the place where it is
supplied or not, and consisting of -
( a ) meals or snacks;
( b ) milkshake, tea, coffee and chocolate supplied in liquid form;
( c ) ice cream or products containing ice cream except in family packs.
(2) For the purposes of paragraph (1) hereof -
( a ) "meals or snacks" means and includes:
(i) hot and cold dishes including antipasto and dessert;
(ii) sandwiches, toast, potato chips, sausage rolls, pizza, pastizzi,
qassatat and similar snacks;
(iii) biscuits, cakes, confectionery and similar items but excluding
those sealed in a package by the manufacturer and supplied in that
original sealed package and those items which individually weigh
500 grams or more;
( b ) "family pack" means ice creams of not less than 350 grams in weight.
Pharmaceutical goods
3. "Pharmaceutical goods" means the goods specified in the Customs Tariff
contained in the First Schedule to the Import Duties Act under:
(i) Subheading 2905.45.00.00 in Chapter 29
(ii) Chapter 30
(iii) Subheadings 3301.90.30.00; 3306.10.00.00; 3306.20.00.00; 
3306.90.00.00; 3307.90.00.10 in Chapter 33.
(iv) Subheading 3407.00.00.10 in Chapter 34. 
(v) Subheading 3507.10.00.00 in Chapter 35.
(vi) Subheadings 3822.00.00.10, 3824.91.61; 3824.90.61.00;
3824.90.64.00 in Chapter 38.
  52  CAP. 406. _h    VALUE ADDED TAX 
(vii) Subheadings 4818.40.91.00 and 4818.40.99.00 in Chapter 48.
(viii) Subheadings 5601.10.10.90 and 5601.10.90.90 in Chapter 56.
(ix) Subheading 7015.10.00.00 in Chapter 70.
(x) Subheadings
9001.30.00.00; 9001.40.41.00; 9001.40.49.00; 9001.40.80.00;
9001.50.41.00; 9001.50.49.00; 9001.50.80.00;  9004.90.10.10;
and 9004.90.90.10;
headings 9018, 9019, 9020, 9021, 9022 and 9023;
and subheading 9025.11.91.00 in Chapter 90.
(xi) Subheading 9402.10.00.10 in Chapter 94.
Printed matter and other articles
4. "Printed matter and other articles" means the goods specified in the Customs
Tariff contained in the First Schedule to the Import Duties Act under:
(i) Subheading 4820.20.00.00 in Chapter 48.
(ii) Chapter 49 but excluding items falling under subheadings
4906.00.00.00; 4907.00.90.00; 4908.10.00.00;  4908.90.00.00;
4909.00.10.00; 4909.00.90.00; 4910.00.00.90; 4911.99.00.10
in Chapter 49.
(iii) Subheading 7118.90.00.00 in Chapter 71.
(iv) Chapter 98 but excluding items falling under subheading
9803.00.00.00.
Immovable property
5. (1) Saving the provisions of paragraph (2) of this item "immovable
property" includes any asset that is immovable property by definition of the law.
(2) "Letting of immovable property" includes -
( a ) the provision of any accommodation under any title in immovable
property and any other form of supply of the use of immovable
property;
( b ) an emphyteutical grant for a period not exceeding 50 years.
Non-profit making organisations
6. A "non-profit making institution or organisation" means an institution or
organisation:
(i) whose objects are clearly defined in its statute;
(ii) whose objects expressly exclude profit making;
(iii) whose statute provides that no part of its income or property is
available directly or indirectly to any member, proprietor or
shareholder;
(iv) which, in the opinion of the Commissioner, is managed and
administered in accordance with the provisions of its statute and
for the purpose of its stated objects;
(v) which does not systematically aim to make a profit.
VALUE ADDED TAX _g CAP. 406.  53
FIFTH SCHEDULE Amended by:
L.N. 24 of 2001.
_gArticle 9(2)_h
Exempt Importations
1. The re-importation of -
( a ) goods which are re-imported unaltered;
( b ) samples which had been temporarily exported.
2. The importation of articles which are shown to the satisfaction of the
Comptroller of Customs to have been awarded abroad to any person for distinction
in art, literature, science or sport, or for public service, or otherwise as a record of
meritorious achievement or conduct, and imported by or on behalf of that person.
3. (1) The importation of artificial limbs and other surgical appliances of a
similar nature, including spare parts and accessories for the relief of permanent
bodily disablement, provided that, in the case of spare parts and accessories, the
Comptroller of Customs is satisfied that they are imported for the purpose of making
locally artificial limbs or such other appliances, and invalid chairs which the
Comptroller of Customs is satisfied are for the exclusive use of a person suffering
from some permanent physical defect or disability.
(2) The importation of goods which are specifically designed for the
education, employment or social advancement of a person suffering from some
permanent physical or mental disability, provided that the Comptroller of Customs is
satisfied that the said goods are imported for the exclusive use of such person.
4. The importation of  bona fide  gifts of a non-commercial nature received
occasionally by a person from another person residing abroad and being intended for
the personal use of the consignee and his family, provided the gift is neither alcohol
nor alcoholic beverage nor tobacco or tobacco products and the total CIF value of
the gifts on every single occasion does not exceed fifty liri .
5. The importation of braille and any other article for the use of the blind
imported through a recognised institute, if the Comptroller of Customs is satisfied
that such articles are imported for the exclusive use of a blind person.
6. The importation of hearing-aid apparatus designed for the use of the deaf
and identifiable parts thereof.
7. The importation of household and personal effects, furniture and other
domestic articles (excluding firearms and weapons of all kinds) which in the opinion
of the Comptroller of Customs have been in use within that household by the
importing person or his family, and which are imported by such person on removing
his household from another country to Malta provided that such articles are imported
within six months from the date of arrival in Malta of the person importing them to
take up residence in Malta, or within such other period which the Comptroller of
Customs may allow.
8. The importation of one private motor vehicle imported by a Maltese migrant
(husband and wife counting as one person for the purposes hereof) who returns to
reside in Malta, subject to such migrant satisfying the Comptroller of Customs that -
( a ) He had been residing outside Malta for an aggregate of ten years during
the period of fifteen years immediately preceding his arrival to take up
residence in Malta; and
( b ) the motor vehicle has been in his ownership for a continuous period of
at least six months immediately before his arrival to take up residence in
  54  CAP. 406. _h    VALUE ADDED TAX 
Malta, provided that customs charges and/or fiscal charges to which
such vehicle is normally liable have been paid either in the country of
origin or in the country of departure and subject to the motor vehicle
being imported within six months of such migrant’s arrival to take up
residence in Malta:
Provided that, where any such motor vehicle which is imported free of Value
Added Tax is sold or disposed of by such person for use in Malta, such motor-
vehicle shall be deemed to be taken out of bond at the time of such sale or disposal
and the Value Added Tax shall be payable thereon by the person who becomes the
owner thereof.
9. The importation of one private motor-vehicle imported by a person (husband
and wife counting as one person for the purposes hereof) who transfers his residence
to Malta, subject to such person satisfying the Comptroller of Customs that -
(i) he is in possession of a permit of residence issued to him by the
Government in terms of article 7(1) of the Immigration Act; and
(ii) the motor-vehicle has been in his ownership for a continuous
period of at least six months immediately before the issue of the
said permit, provided that customs charges and/or fiscal charges
to which such vehicle is normally liable have been paid either in
the country of origin or in the country of departure and subject to
the motor-vehicle being imported within six months of the date of
the said permit or of such person’s arrival in Malta to take up
residence, whichever date is the later:
Provided that, where any motor-vehicle imported as aforesaid free of Value
Added Tax is sold or disposed of by such person for use in Malta, such motor-
vehicle shall be deemed to be taken out of bond at the time of such sale or disposal
and Value Added Tax shall be payable thereon by the person who becomes the
owner thereof.
10.  The importation of -
( a ) passengers’ baggage, including wearing apparel and personal effects,
used, which the Comptroller of Customs is satisfied are intended for the
passengers’ personal use, but excluding firearms and weapons of all
kinds;
( b ) (i) two hundred cigarettes OR 100 cigarillos OR 50 cigars OR 250
grams of smoking tobacco;
(ii)  one litre of spirits OR two litres of intermediary products and
sparkling wine;
(iii) two litres of wine;
(iv) fifty grams perfume and 0.25 litre of toilet water:
Provided that the allowance on tobacco products and alcoholic
beverages referred to in subparagraphs (i), (ii) and (iii) may not be
granted to persons under seventeen years of age or who have been out of
Malta for less than twenty-four hours.
( c )  such goods bought for the passenger’s own use or as  bona fide  gifts,
other than the goods mentioned in sub-paragraphs ( a ) and ( b ) of this
item up to a value of Lm50, sohowever that where the total value of such
goods exceeds Lm50, this provision shall not apply and the tax
chargeable on such goods shall be deducted by Lm7.50.
VALUE ADDED TAX _g CAP. 406.  55
11. The importation of samples of no commercial value.
12. The importation of scientific instruments or apparatus, intended exclusively
for educational purposes of pure scientific research, provided -
( a ) that such scientific instruments or apparatus are consigned to a public or
private scientific or educational institution approved by the Minister
responsible for education for the purpose of this provision and are used
under the control and responsibility of such institution; and
( b ) that instruments or apparatus of equivalent scientific value are not being
manufactured in Malta.
13. The importation of sound and video recordings -
( a ) of an educational, scientific or cultural character produced by the
United Nations or any of its specialised agencies;
( b ) of an educational nature imported by a government school or institution,
by the University of Malta or by a school or institution registered under
the Education Act provided that the Director of Education certifies that
the materials are solely of an educational character and are to be used
solely and entirely for educational purposes by such school.
14. Statues and artistic decorations cast abroad from originals made by local
artists, provided permission is obtained from the Comptroller of Customs before the
original is forwarded abroad for casting.
15. The importation of goods the supply of which would, in all cases, be an
exempt supply in terms of the Fourth Schedule to this Act.
16. The importation of food as defined in Part Three of the Fourth Schedule to
this Act.
17. The importation of gold bullion by the Central Bank.
18. The importation of goods where the Commissioner is satisfied that the said
goods were imported for temporary use only, and subject to such conditions and to
the provision of such security as the Commissioner may impose or require.
19. The importation of goods which are re-exported without being released or
immediately upon being released from a customs bond.
20. The importation of goods which are destroyed by the owner before they are
released or immediately upon being released from a customs bond under such
supervision and subject to such conditions as the Commissioner may require or
impose.
21. The importation of goods into a Freeport as defined in the Malta Freeports
Act: provided that this exemption shall apply only to the extent that the said
importation is exempt from customs duty pursuant to the said Act, and shall be
subject to all the conditions and limitations as are applicable under that Act to the
said exemption from customs duty.
22. The importation of goods which is exempt from tax in virtue of an
exemption granted under article 9(3).
  56  CAP. 406. _h    VALUE ADDED TAX 
_gArticle 16_h
Small Businesses
1. An economic activity of a registered person who is not an exempt person
qualifies as a small business if the turnover of that person for the relevant period is
less than the threshold in the second column of the Table in this Schedule
corresponding to the category in the first column of that Table under which that
economic activity is classified by the Commissioner.
2. Subject to the other provisions of this Schedule "turnover" of a person
means the total value of all supplies made by that person in the course or furtherance
of his economic activity during the relevant period, excluding:
( a ) exempt without credit supplies
( b ) a transfer of a business as a going concern
( c ) the transfer or disposal of fixed assets
( d ) a supply made to that person and deemed to be made by him in virtue of
article 65.
3. When it appears to the Commissioner that the turnover for the relevant
period has been negatively affected by specific extraordinary circumstances,
including the temporary suspension of the economic activity, the turnover will be the
amount obtained after such adjustment as the Commissioner might deem appropriate
in the circumstances.
4. In the case of a company constituted under the laws of Malta that forms part
of a group of companies its turnover shall be deemed to be the total of the amounts
of the turnover of all the companies within that group. In this item "group of
companies" has the meaning assigned to it in article 42 of the Duty on Documents
and Transfers Act.
5. The "relevant period" on any particular date is the period of twelve months
ending on the last day of the calendar quarter preceding that in which that date falls
and for the purpose of this item and item 6 of this Schedule a calendar quarter is a
period of three calendar months ending on the 31 March, the 30 June, the 30
September and the 31 December, as the case may be.
6. When, however, a registered person commences an economic activity the
following special provisions shall apply:
( a ) during the first thirty days his economic activity will be deemed to
qualify as a small business if the Commissioner is satisfied that it is
reasonable to expect that the turnover for the first twelve months will be
less than the applicable threshold under the Third column of the Table
in this Schedule;
( b ) if that person is classified as an exempt person on registration he will be
deemed to remain eligible for that classification up to the expiration of
the first full calendar quarter after his registration; and thereafter the
provisions of items 5 and 10 of this Schedule will apply as if the
applicable threshold under the Third column of the Table were an
amount reduced proportionately to the ratio which the full calendar
months that elapsed since his registration bear to twelve months;
Amended by:
L.N. 29 of 1999. SIXTH SCHEDULE
VALUE ADDED TAX _g CAP. 406.  57
( c ) if that person is not classified as an exempt person on registration he
will not be eligible for classification as an exempt person before the
lapse of twelve full calendar months from registration and the other
provisions of this Schedule shall thereafter apply.
7. For the purpose of computing the turnover for a period that commenced
before the effective date the value and the description of supplies made before the
effective date and all other terms relevant for that purpose shall be construed
according to their meaning under this Act.
8. The Commissioner shall make a categorisation of the economic activity of
every registered person for the purposes of this Schedule and shall notify that
categorisation to that person. The Commissioner may review a categorisation if he
has reason to believe that there are grounds for such a review.
9. A   registered person whose economic activity qualifies as a small business in
accordance with this Schedule is eligible for a classification as an exempt person:
Provided that -
( a ) a person who has been classified as an exempt person and whose
classification has been cancelled is not eligible to be re-classified as an
exempt person before the expiration of thirty-six whole months from the
date of that cancellation;
( b ) paragraph ( a ) of this proviso shall not have effect before the first of
January 2000; and
( c ) a person who commences a new economic activity is eligible to apply
for a classification as an exempt person upon registration in the
circumstances mentioned in item 6 of this Schedule.
10. A person classified as an exempt person is not entitled to remain so
classified if the turnover from his economic activity for the relevant period is equal
to or exceeds the threshold listed in the Third column of the Table in this Schedule
corresponding to the category in the First column of that Table under which his
economic activity has been classified by the Commissioner.
11. A person who is classified as an exempt person shall give all information
that the Commissioner may reasonably request for the purpose of ascertaining the
correctness of that classification.
12. Any registered person who is classified as an exempt person may apply for
the cancellation of his classification unless otherwise prescribed by regulations. 
13. The forms to be used for applications for an exempt person classification
and for the cancellation of a classification, the declarations and information and
documents to be furnished by exempt persons on a periodical basis or otherwise, the
information which an exempt person should show on invoices issued by him and on
business correspondence and such other matters as may be necessary to ensure the
correct application of the provisions of this Schedule shall be those as the
Commissioner may from time to time direct unless the Minister shall by regulations
prescribe otherwise.
TABLE
First Column Second Column  Third Column
Category Threshold below 
which a person may 
opt out 
Threshold above 
which a person has 
to be in
  58  CAP. 406. _h    VALUE ADDED TAX 
SEVENTH SCHEDULE
_gArticle 18_h
Taxable Value of Supplies and Importations
1. Except as otherwise provided in the other provisions of this Schedule, the
taxable value of a supply shall be the total value of the consideration paid or payable
to the supplier by the purchaser, the customer or any other person for the supply, but
excluding the value added tax chargeable under this Act on that supply.
2. When the consideration is paid or payable wholly or partly in kind its value,
to the extent that it is so paid or payable, shall be its open market value.
3. The taxable value of a supply shall include:
( a ) taxes, duties, levies, fees and other charges (excluding the value added
tax chargeable under this Act) payable by reason of the supply;
( b ) commissions, packing, transport and insurance costs and other
incidental expenses charged by the supplier to the purchaser or
customer.
4. The taxable value of a supply shall be the amount after deducting:
( a ) price reductions by way of discounts for early payment;
( b ) price discounts and rebates allowed to the customer and accounted for at
the time of the supply;
( c ) price discounts and rebates allowed to the customer after the time of the
supply where the Commissioner is satisfied that they were so allowed
for  bona fide  commercial reasons.
5. Where the consideration for a supply is lower than the open market value
and the person making the supply and the person to whom the supply is made are not
independent of each other, or where the value of the consideration for a supply
cannot be readily determined, the taxable value of that supply shall be the open
market value of the goods or services supplied.
6.  For the purposes of the foregoing paragraphs:
( a ) two persons shall be deemed not to be independent of each other if,
whether directly or indirectly, either of them has any interest in the
business or property of the other, or both have a common interest in any
Lm Lm
A Economic activities consisting
principally in the supply of
goods 12,000 15,000
B Economic activities consisting
principally in the supply of
services with a relatively low
value added 8,000 10,000
C Other economic activities 5,000 6,000
VALUE ADDED TAX _g CAP. 406.  59
business or property, or some third person has an interest in the business
or property of both parties, provided, in each case, that such interest
has, in the opinion of the Commissioner, influenced the terms regulating
agreements between those two persons;
( b ) the open market value of goods or services means the price which they
would fetch if sold or provided in the open market on the date and in the
state they are in when the said goods are delivered or the said services
are performed.
7. Where any value relevant for the determination of the taxable value of a
supply is expressed in a foreign currency the exchange rate applicable shall be the
middle rate determined by the Central Bank for the date when the supply takes place.
8. Where the amount of tax chargeable under this Act is not identified in a
payment for a taxable supply or in a price charged for a taxable supply that payment
or price shall be deemed to include the said tax.
9. (1) Subject to the other provisions of this item, the taxable value of any
imported goods shall be the value of the said goods at the time when the tax on the
said importation is payable in terms of this Act, which value shall be established in
the same manner as that applicable in terms of the Import Duties Act for the
determination of the value on which duty  ad valorem  is chargeable under that Act,
and all the relevant provisions of that Act shall apply  mutatis mutandis  and for the
purposes of this paragraph the references in the said provisions to the Comptroller of
Customs shall be construed as references to the Comptroller of Customs acting on
behalf of the Commissioner.
(2) The value established as aforesaid shall be increased by any import
duties chargeable on the importation of the said goods under the Import Duties Act,
by any levies chargeable on the said importation under the Local Manufactures
(Promotion) Act, by any excise duty chargeable under the Excise Duty Act by reason
of the importation of those goods and, in the case of motor vehicles, by the tax
chargeable under the Motor Vehicles Registration Tax Act.
(3) Where the said goods are transferred in Malta before the date on which
the tax on their importation becomes payable in terms of this Act, the taxable value
shall be the value of the consideration paid or payable for the said transfer or the
value established in accordance with the other provisions of this item, whichever is
the higher.
(4) The provisions of the other items of this Schedule relating to the
determination of the value of the consideration paid or payable for a taxable supply
shall apply for the determination of the value of the consideration referred to in
paragraph (3) of this item.
  60  CAP. 406. _h    VALUE ADDED TAX 
Rate of tax
The tax chargeable under this Act on the taxable value of the supplies described in
the first column of the Table in this Schedule shall be at the rate specified in the
second column of that Table.
Amended by:
L.N. 273 of 2000;
L.N. 25 of 2001;
L.N. 388 of 2002;
L.N. 375 of 2003;
L.N. 384 of 2003.
EIGHTH SCHEDULE
_gA R T I C L E  19( C )_h
TABLE
First Column Second Column
Description of Supplies  Rate
The supply of accommodation in any premises which for the
purpose of the provision of such accommodation is required to be
licensed in virtue of the Hotels and Catering Establishments Act or
of the Guest Houses and Holiday Furnished Premises Act or any
other Act which may be substituted therefor. 5%
Provided that where the price charged for the supply of
accommodation includes the supply of goods or services not
falling within the meaning of accommodation the taxable value of
the supply of accommodation shall be deemed to be eighty percent
of the said price and twenty percent of that price shall be deemed
to be the taxable value of supplies not described in this Column.
The goods specified in the Customs Tariff in the First Schedule to
the Import Duties Act under subheading 8419.19.00.10 in Chapter
84 and under subheadings 8516.10.19.10 and 8541.40.90.10 in
Chapter 85. 5%.
Supply of electricity. 5%.
Yachts and other vessels for pleasure or sport specified in the
Customs Tariff contained in the First Schedule to the Import
Duties Act under subheadings 8903.91.10.00, 8903.91.99.00,
8903.92.10.00 and 8903.92.99.00 in Chapter 89.
5% of the
taxable value as
certified by
such valuers as
may be
approved by the
Minister
VALUE ADDED TAX _g CAP. 406.  61
NINTH SCHEDULE
_gArticle 46_h
Appeals to the Value Added Tax Appeals Board
Composition of the Board
1. (1) The Value Added Tax Appeals Board (in this Schedule referred to as
"the Board") shall be composed of a Chairman and two other members who shall be
appointed by the Minister for a period of three years.
(2) The Minister may appoint a panel of persons to serve as Chairmen and
a panel of persons to serve as other members of the Board, in which case the
members shall serve in accordance with such distribution of duties, including
provision for inability of members to serve and other circumstances, as the Minister
may establish.
(3) A member of the Board may not be removed during the period for
which he has been appointed except for proved misbehaviour or inability to perform
his functions.
(4) The provisions of articles 733 to 739, inclusive, of the Code of
Organization and Civil Procedure shall apply to the Chairman and to the other
members of the Board with respect to appeals before the Board in the same manner
as they apply to judges with respect to a cause brought before a court.
(5) A person shall be disqualified from being appointed or continuing to
be a member of the Board if he is a member of the House of Representatives.
(6) In the case of a vacancy in the Board which cannot be filled in
accordance with a distribution of duties established in terms of subarticle (2) the
Attorney General shall appoint a person to fill that vacancy in the hearing and
determination of the case in which the vacancy occurs.
(7) The members of the Board shall receive such remuneration as the
President of Malta may determine.
(8) The members of the Board shall not be personally liable for any act or
default of the Board done or omitted to be done in good faith in the course of the
operations of the Board.
Secretary to the Board
2. (1) There shall be a secretary to the Board, who shall be a public officer
designated as secretary by the Minister.
(2) The Minister may designate other public officers as deputy secretaries.
Competence of the Board
3. (1) The Board shall be competent to hear any appeal against an assessment
and to confirm, reduce or increase any taxable value or credit or tax assessed by the
Commissioner, or cancel the assessment or make such other declaration or order as it
deems fit.
(2) The Board shall be competent to determine any matter referred to it in
accordance with article 44.
(3) The Board may, in any decision, make such order on the costs of the
  62  CAP. 406. _h    VALUE ADDED TAX 
case as it may deem appropriate.
Appeals against assessments
4. (1) An appeal against an assessment shall not be valid unless -
( a ) a return for the tax period to which the assessment refers has been
delivered to the Commissioner before the appeal is entered; and
( b ) all tax payable by the appellant which is not in dispute has been paid;
and
( c ) an amount of five per cent of the tax which is in dispute in terms of that
appeal or fifty liri, whichever is the higher, and an administrative fee of
twenty-five liri have been paid; and
( d ) it is made within thirty days from the date of the service of the notice
against which the appeal is made; and
( e ) it is made in such form and in such manner as may be prescribed.
(2) The onus of proving that any taxable value assessed by the
Commissioner is excessive or that any credit assessed by the Commissioner is
insufficient shall lie on the appellant.
(3) The Board may refuse to consider any evidence as sufficient for the
purpose of paragraph (2) of this item if the appellant has failed to keep the records
and documents required to be kept by this Act or fails to produce such records or
documents.
(4) The Board shall deliver its decision in writing and shall cause a copy
of the decision to be served on the appellant.
Payment of the tax
5. (1) When a valid appeal has been made against an assessment, the
payment of so much of the tax assessed which is in dispute as is not required to be
paid before the appeal is made in accordance with item 4(1)( c ) of this Schedule may
be kept in abeyance until the appeal is finally determined: provided that the running
of interest on the said tax shall not be meanwhile suspended.
(2) The running of the period referred to article 58(2) shall be suspended
in respect of any tax or administrative penalty for any time during which the
payment thereof may be kept in abeyance in terms of this item.
(3) Where the tax payable as a result of a decision of the Board on an
appeal against an assessment exceeds the tax shown to be payable in the said
assessment, the excess shall be payable by not later than the end of the month during
which the said decision is served on the appellant and interest at the rate specified in
article 22(2) shall be due on such excess from the said date for any period during
which such excess remains unpaid.
References to the Board
6. (1) A reference to the Board of any matter referred to in article 44 may not
be made unless it has first been raised in correspondence with the Commissioner and
an administrative fee of twenty-five liri has been paid, and shall be made by means
of an application in writing which shall state clearly all the facts relevant to that
matter and the manner in which, in the opinion of the applicant, that matter should be
determined.
VALUE ADDED TAX _g CAP. 406.  63
(2) The Board shall, after hearing all parties having an interest in the
matter, and obtaining all relevant information, decide the matter and cause its
decision to be served on the parties.
Procedures of the Board
7. (1) The Board shall have the power to summon any person to give
evidence or to produce books or other documents and the Chairman shall have the
power to administer an oath to any person appearing before the Board.
(2) The Minister may by regulations prescribe the manner in which an
appeal or application is to be made to the Board, the place where the Board shall
hold its sittings, the manner in which the parties may be assisted, the fees payable on
appeals, the records to be kept by the Board, the functions of the secretary to the
Board, and generally any matter relating to the procedures of the Board.
  64  CAP. 406. _h    VALUE ADDED TAX 
TENTH SCHEDULE
_gArticle 22(3)_h
Forms to be presented with payment of the tax
VALUE ADDED TAX _g CAP. 406.  65
  66  CAP. 406. _h    VALUE ADDED TAX 
Eligibility for credit for input tax
1. (1) No amount shall be treated as input tax of a person unless that person
is a registered person at the time when that tax becomes chargeable.
(2) For the purposes of paragraph (1) of this item, when a registration of a
person made on a date is made effective as from an earlier date, that person shall be
treated as a registered person as from the said earlier date.
(3) Except as the Commissioner may otherwise allow no credit for input
tax for a tax period shall be allowed to a person unless a claim is made in the
appropriate part on the form of the tax return delivered for that period.
Input tax incurred before the registration of a company
2. (1) Subject to the other provisions of this item, where a company proves
to the satisfaction of the Commissioner that tax was paid or payable on the supply or
importation of goods made to or by a person for that company or on the supply of
services supplied to a person for the benefit of the company or for the purpose of its
formation and registration, the Commissioner may treat such tax as part of the input
tax of that company for its first tax period.
(2) No account shall be taken of any supply or importation which took
place earlier than six months before the registration of that company.
(3) This item shall not apply to a supply or importation made to or by a
person -
(i) who was, at the time of supply or importation, a taxable person; 
(ii) who did not become a member, director or secretary of the
company;
(iii)  unless that person was reimbursed or received an undertaking to
be reimbursed by the company for the whole amount of the price
paid for the goods or services;
(iv) unless that person acquitted the goods or services for the purpose
of an economic activity to be carried on by that company and has
not used them for any purpose other than for that economic
activity.
(4) Save as the Commissioner may otherwise allow, a claim for the
application of this item shall be made by a company by not later than the date on
which it furnishes the tax return for its first tax period and shall be supported by such
documents and evidence as the Commissioner may deem necessary.
Amended by:
L.N. 60 of 1999;
L.N. 200 of 1999;
L.N. 217 of 1999;
L.N. 272 of 2000;
L.N. 93 of 2001;
L.N. 235 of 2001;
L.N. 389 of 2002.
ELEVENTH SCHEDULE
_gArticle 24(6)_h
Deductions
VALUE ADDED TAX _g CAP. 406.  67
Evidence of input tax
3. (1) No amount shall be treated as input tax of a person unless that person
proves that the tax was chargeable on supplies of goods and services or importations
of goods which have been or which will be used by him in the course or furtherance
of his economic activity.
(2) Except as the Commissioner may otherwise allow, no amount shall be
treated as input tax of a person unless -
( a ) it is supported by a tax invoice or by a document of importation
indicating the tax paid on that importation, held, in each case, by that
person and produced, if requested, to the Commissioner;
( b ) it is properly accounted for in the records held by that person for the
purposes of the Act.
Tax which is not to be treated as input tax
4. (1) Subject to paragraph (2) of this item, no amount shall be treated as
input tax of a person to the extent to which it represents tax chargeable on:
( a ) the supply to that person or importation by that person of:
(i) tobacco or tobacco products;
(ii)  alcoholic beverages;
(iii)  works of art, collectors’ items and antiques;
(iv)  motor vehicles, vessels or aircraft, including the supply thereof
for hire or leasing arrangements;
(v) goods and services for the purpose of repairing, maintaining,
fuelling and keeping any item to which item (iv) of this sub-
paragraph applies;
(vi) the supply of bottled gas;
(vii) the supply of electricity;
( b ) the supply of any goods and services used in the provision by that
person of receptions, entertainment or hospitality except where the said
provision is made for a consideration in the normal course of that
person’s economic activity;
( c ) the supply of any goods and services used in the provision by that
person to his employees or, in the case of a body of persons, to its
officers or employees, of transport or entertainment; provided that this
provision shall not apply to transport provided by that person to his
employees on vehicles with a seating capacity of not less than seven.
(2) The provisions of items (i) to (v) of paragraph (1) of this item shall not
apply to:
( a ) goods acquired by a person for the purpose of resale, whether in the
state in which they were acquired or after treatment or processing or
inclusion in other goods supplied by that person, in the normal course of
that person’s economic activity;
( b ) motor vehicles, vessels or aircraft acquired by a person and used by him
for the purpose of the carriage of goods or passengers for a
consideration; 
( c ) vessels and aircraft acquired by a person for the purpose of being
  68  CAP. 406. _h    VALUE ADDED TAX 
provided by him under a charter or hire agreement;
( d ) motor vehicles acquired by a person for the purpose of being provided
by him for hire with a driver or for self-drive hire (excluding fuelling
for such self-drive vehicles), or of being used for driving instructions,
provided they are so used, in each case, in the normal course of that
person’s economic activity;
( e ) motor vehicles designed and manufactured for the carriage of goods and
so designed and manufactured with seating accommodation normally
adjacent to the driver, or with seating accommodation for nine persons
or more.
(3) In this item, "works of art, collectors’ items and antiques" shall have
the meaning assigned to it by paragraphs (1), (2) and (3) of item 1 of Part B of the
Fifteenth Schedule.
Tax partially treated as input tax
5. Where any goods or services are or will be used but not wholly used in the
course or furtherance of an economic activity there shall be treated as input tax such
proportion of the tax chargeable on the supplies or importations in question as the
Commissioner may consider reasonable taking into account the proportion of the use
of those goods or services in the course or furtherance of the economic activity to
their total use.
Attribution of input  tax
6. (1) Any input tax for a tax period which is exclusively attributable to
supplies to which article 24(3) applies shall be allowed as a credit for that period.
(2) Any input tax which is exclusively attributable to supplies other than
those referred to in paragraph (1) of this item shall not be allowed as a credit.
(3) Any input tax for a tax period which is attributable both to supplies to
which article 24(3) applies and also to other supplies shall be partially allowed as a
credit for that tax period, which portion shall be determined in accordance with
items 7 or 8 of this Schedule.
Partial attribution
7. (1) Subject to the other provisions of this Schedule, the portion of the
input tax allowable as a credit for a tax period in accordance with paragraph (3) of
item 6 of this Schedule, shall be equivalent to such proportion of the said input tax as
corresponds to the proportion which the value of the said supplies to which article
24(3) applies, made during that tax period bears to the value of all the supplies made
during that period.
(2) For the purposes of paragraph (1) of this item:
( a ) the value of exempt supplies shall be determined in the manner
applicable for the determination of the taxable value of taxable supplies;
( b ) there shall be excluded from the value of the supplies made by that
person during that period -
(i) the value of any supply of capital goods;
(ii) the value of any supply which under or by virtue of any provision
of the Act that person makes to himself;
VALUE ADDED TAX _g CAP. 406.  69
(iii) the value of any supply which is not made by a registered person
acting as such;
(iv) the value of any supply deemed to have been made by that person
in terms of article 65 of the Act.
(3) The Commissioner may make such adjustments to the values to be
taken into account for the purpose of an apportionment to which this item applies as
to him may seem reasonable for the purpose of excluding distortions on account of
seasonal, extraordinary, occasional or incidental supplies.
Alternative methods of partial attribution
8. (1) Where the supplies made during a tax period do not include any
supplies to which article 24(3) applies and where a partial credit for input tax for that
period is due to be made, were it not for the provisions of paragraph (1) of item 7, in
virtue of paragraph (3) of item 6 of this Schedule, the Commissioner may allow as a
credit such portion of the input tax for that period as to him may seem reasonable,
and may, in allowing such credit, impose such conditions and require such warranty
as he may deem appropriate.
(2) Where it appears to the Commissioner that the method of attributing
input tax laid down in item 7 of this Schedule does not give a fair and reasonable
result, he may by notice in writing to a registered person direct that the said method
shall not apply to the attribution of input tax to the supplies of that person and where
such a direction has been given, that person shall adopt such other method of partial
attribution as the Commissioner may approve.
(3) In giving his approval in terms of paragraph (2) of this item the
Commissioner may -
( a ) require that the same method shall continue to be used for such period
he may specify;
( b ) impose such other conditions and require such warranty as he deems
appropriate.
Adjustment of partial attribution
9. (1) Within six months from the end of any calendar year the
Commissioner may by notice in writing require or allow a registered person to whom
a partial credit for input tax has been allowed for any tax period ending during the
said year to make an adjustment to the total credits for input tax allowed for the tax
periods ending during the said year, which adjustments shall consist of the
difference between the total credits allowed as aforesaid and the credit resulting
from an attribution based on annual results.
(2) The credit resulting from an attribution based on annual results means
a proportion of the total input tax periods ending in the calendar year in question.
(3) The provisions of paragraphs (1) and (2) of item 7 and paragraph (2) of
item 8 of this Schedule shall apply for the purpose of an apportionment to which this
item applies provided that references in the said paragraphs to a tax period shall be
construed as references to the tax periods ending in the said year.
(4) The adjustment requested or allowed by means of a notice served on a
registered person in accordance with paragraph (1) of this item shall be treated for
all purposes of the Act as further credit for input tax, or as a further liability for
output tax, as the case may be, for the tax period immediately following that during
  70  CAP. 406. _h    VALUE ADDED TAX 
which that notice is served on that person, and shall be reported on the relative return
and accounted for accordingly.
Rounding up
10. (1) A fraction resulting from any computation made in accordance with
this Schedule shall be rounded up to the nearest lira.
(2) Where the amount of input tax which results to be not allowable as a
credit pursuant to an apportionment made in accordance with items 7, 8 or 9 of this
Schedule is less than Lm10 multiplied by the number of months or part thereof
included in the tax period or periods to which that apportionment relates that amount
shall, notwithstanding the other provisions of this schedule, be treated as allowable
as a credit for input tax.
Bad debts relief
11. (1) Where a registered person shows to the satisfaction of the
Commissioner that an amount due to him as consideration for a supply made to
another person has, during a tax period, become a bad debt and that output tax has
been paid or is payable by the said registered person in respect of that supply, that
registered person may claim the amount of the said output tax to be allowed as a
deduction in addition to any other deduction allowable to him in accordance with the
other provisions of this Schedule for that tax period or for such subsequent tax
period as the Commissioner may allow.
(2) A claim for a deduction in respect of a bad debt shall be subject to
such directives as the Commissioner may give as to the circumstances in which it
may be made and the documents or other evidence that should be produced.
(3) The recovery of a bad debt in respect of which a deduction has been
allowed in terms of this paragraph or of a part of such a debt shall, to the extent of
the amount recovered, be treated as a taxable supply taking place at the time the said
debt or part thereof is paid and shall be accounted for accordingly by the person to
whom the deduction has been so allowed.
Limitation of input  tax  attributable to certain supplies
12. (1) This item shall apply to tax chargeable on taxable supplies made to a
registered person and to tax paid on taxable importations made by that person to the
extent that it is attributable to supplies made or to be made by that person and
specified in sub-paragraph ( a ) or sub-paragraph ( d ) of paragraph (1) of item 1 of Part
Two of the Fourth Schedule to this Act:
Provided that this item shall not apply to any tax which is attributable to the
provision of accommodation in a hotel licensed as such under the provisions of the
Hotels and Catering Establishments Act, or any Act that is substituted therefor, or of
services to persons supplied with accommodation in such a hotel consisting in
amenities provided within that hotel.
(2) Notwithstanding the other provisions of this item, the amount of tax to
which this item applies which may be treated as input tax of a registered person for a
tax period shall not exceed the amount of the output tax of that person for that period
on the supplies to which that amount is attributable.
(3) Any amount of tax which is not treated as input tax of a registered
person for a tax period solely by reason of the limitation provided for in paragraph
VALUE ADDED TAX _g CAP. 406.  71
(2) of this item shall be deemed to be the input tax of that person for the subsequent
tax period in addition to any other input tax for that period, provided that:
( a ) the amount of tax to which this item applies may be treated as input tax
for the subsequent tax period shall again be subject to the said
limitation;
( b ) where an amount of tax is not treated as input tax for a tax period by
reason of the said limitation and the supplies made by that registered
person for a number of subsequent consecutive tax periods covering at
least twelve months do not include any supplies specified in sub-
paragraph ( a ) or sub-paragraph ( d ) of paragraph (1) of item 1 of Part
Two of the Fourth Schedule to this Act, other than supplies referred to
in the proviso to paragraph (1) of this item, that amount shall not be
treated as input tax for any subsequent tax period;
( c ) nothing in this item shall be construed as deeming any amount which
has not been treated as input tax by reason of the said limitation for a
tax period as an excess credit for any tax period.
Input tax attributable to supplies of cable telephony
13. (1) Where the economic activity of part of that activity of a registered
person consists in the supply of cable telephony to non-registered persons, the
amount of input tax that may be claimed back by such registered person in relation to
such supply may be increased by the difference between such percentage of the total
of such supplies as the Commissioner may establish and the amount of input tax that
may be claimed back in relation to all supplies of cable telephony:
Provided that no increase or input tax shall be claimed as aforesaid where
the amount of input tax that may be claimed back exceeds that percentage
established by the Commissioner.
(2) Within three months from the end of the year, such registered person
shall make an adjustment to the total input tax claimed during that year on the results
of that year.
(3) Sub-regulation (1) of this regulation shall apply up to 31st December,
2000.
  72  CAP. 406. _h    VALUE ADDED TAX 
TWELFTH SCHEDULE
_gArticle 28_h
Tax Records
Records to be kept
1. Every registered person shall, for the purpose of accounting for the tax, keep
the following records and documents:
( a ) proper accounts and records of his economic activity;
( b ) his value added tax account;
( c ) his annual value added tax account;
( d ) copies of all tax invoices issued by him;
( e ) all tax invoices received by him;
( f ) documentation relating to importations and exportations by him;
( g ) copies of all fiscal receipts issued in terms of the Fourteenth Schedule
to this Act;
( h ) all credit notes, debit notes and other documents issued by him or
received by him which evidence an increase or a decrease in the
consideration for any supplies or for importations.
Matters to be included in the records
2. The accounts and records of every registered person shall be kept in such a
way as to enable the following matters to be readily ascertained:
( a ) the total value of the supplies made by him during each tax period, and
separate totals of the value of - 
(i) goods taxable at 15%, exclusive of tax;
(ii) services taxable at 15%, exclusive of tax;
(iii) accommodation taxable at 5%, exclusive of tax;
(iv) exports;
(v) supplies, other than exports, referred to in Part One of the Fourth
Schedule to this Act (exempt with credit);
(vi) supplies referred to in Part Two of the Fourth Schedule to this Act
(exempt without credit);
( b ) the total value of his importations, purchases and other inputs for each
tax period, and separate totals of the value of -
(i) taxable goods purchased for resale, excluding tax;
(ii) exempt goods purchased for resale;
(iii) capital goods purchased;
(iv) taxable services and taxable overheads, excluding tax;
( c ) where the supplies made by him include supplies referred to in Part Two
of the Fourth Schedule the apportionment or other method applicable in
terms of the Act or any regulations made under the Act for the
attribution of the input tax to the supplies made by him; 
( d ) the tax paid or payable, the tax refunded or refundable and the excess
VALUE ADDED TAX _g CAP. 406.  73
credit carried forward, if any, for each tax period.
The Value Added Tax Account
3. (1) The Value Added Tax Account shall be a separate account held for
each tax period of the taxable person and shall be divided into the "Output tax
portion" and the "Input tax portion".
(2) The output tax portion of the Value Added Tax Account shall show the
total output tax chargeable for the relative tax period showing separate totals of
output tax chargeable at different rates, and shall contain a cross reference to the
accounts from which the values of the supplies to which the said output tax refers
can be ascertained.
(3) The input tax portion of the Value Added Tax Account shall show the
total input allowable as a deduction for that period, distinguishing between input tax
on importations and on supplies, and shall contain a cross reference to the accounts
from which the values of the importations and supplies to which the said input tax
refers can be ascertained.
Correction of Mistakes
4. (1) Where a registered person, in a return for a tax period furnished to the
Commissioner -
( a ) overstates or understates the output tax and the overstatement or
understatement does not exceed five per cent of the output tax declared
in the said return, and/or
( b ) overstates or understates the credit for input tax and the overstatement
or understatement does not exceed five per cent of the credit for input
tax declared in the said return,
he may make an adjustment in the Value Added Tax Account for the tax period
during which the overstatement or understatement is discovered by means of a
deduction from or an addition to the total for that tax period of the output tax portion
and/or the input tax portion, as the case may be, and the output tax and input tax for
the period shall be deemed to be respective totals thereof as adjusted.
(2) No adjustment may be made in accordance with paragraph (1) of this
item except where the overstatement of the output tax or the input tax results as a
consequence of a mistake on the part of the taxable person.
Adjustments due to change in the consideration
5. (1) Where the output tax or the input tax declared by a person in a tax
return results to have been understated or overstated on account of an increase or
decrease in the consideration for a supply or a cancellation of a supply made to or by
that person which is charged or allowed or made in any tax period subsequent to that
during which the supply was accounted for, that person may make an adjustment in
the Value Added Tax Account for the said subsequent tax period by means of a
deduction from or an addition to the total for that tax period of the output tax portion
and/or the input tax portion, as the case may be, and the output tax and input tax for
that period shall be deemed to be the respective totals thereof as adjusted.
(2) Nothing in this item shall be construed as allowing the determination
of the taxable value of a supply in derogation of any provision contained in the Act
in general and in the Seventh Schedule to the Act in particular.
  74  CAP. 406. _h    VALUE ADDED TAX 
Adjustments based on annual results
6. Where any adjustment falls to be made pursuant to an attribution of input tax
based on annual results in terms of the Eleventh Schedule to this Act, the said
adjustment shall be made to the Value Added Tax Account in accordance with the
said Schedule.
Further provisions relating to adjustments
7. (1) Every adjustment to the Value Added Tax Account shall clearly make
reference to the tax return to which it refers and to all the documents relating to the
understatements and overstatements.
(2) No adjustment may be made in accordance with item 4 or 5 of this
Schedule in the Value Added Tax Account for any tax period which commences later
than six months from the expiration of the tax period for which the relative output
tax or credit for input tax had been overstated or understated.
(3) No adjustments may be made in the Value Added Tax Account for a
tax period in respect of any supply or importation accounted for in a previous period
except in accordance with this Schedule.
Tax Returns
8. The amount of output tax and credit for input tax to be declared by a person
in a tax return for a tax period shall be the amount of output tax and credit for input
tax shown in the records of that person in accordance with this Schedule.
Annual Value Added Tax Account
9. The annual value added tax account shall be an account drawn up for every
calendar year and shall show the total of the totals shown in the output tax portion
and the input tax portion of the Value Added Tax Account for each of the tax periods
ending during that calendar year.
Exceptions
10. (1) The Commissioner may, in any particular case or classes of cases,
require such additional records or documents to be kept, or allow such variations to
the records and documents to be kept in accordance with this Schedule as he may
deem appropriate for any of the purposes of the Act.
(2) This Schedule shall be subject to the general requirements of article 48
of the Act and of any special provision contained in the Act or in any regulations
made under the Act.
VALUE ADDED TAX _g CAP. 406.  75
THIRTEENTH SCHEDULE
_gArticle 50(4)_h
Tax Invoice
Form of tax invoice
1. Save as the Commissioner may otherwise allow, a document shall not
constitute a tax invoice unless it is legible and unless all the particulars required by
this Schedule are properly and fully stated.
Contents
2. (1) Saving the provisions of item 4 of this Schedule, a tax invoice issued
by a person other than an exempt person shall contain the following particulars:
( a ) an identifying number of the invoice;
( b ) the date of supply;
( c ) the name, address and Value Added Tax registration number of the
supplier;
( d ) the name, address and Value Added Tax registration number of the
person to whom the supply is made;
( e ) the type of the supply by reference to the categories listed in item 3 of
this Schedule;
( f ) a description sufficient to identify the goods or services supplied;
( g ) for each description, the quantity of the goods or the extent of the
services, the rate of tax chargeable thereon, and the price payable
expressed in liri, excluding tax;
( h ) the total price payable expressed in liri, before any cash discounts
excluding tax;
( i ) the rate of any cash discount offered;
( j ) the amount expressed in liri of tax chargeable at each rate so
chargeable;
( k ) total amount of tax chargeable expressed in liri.
(2) Saving the provisions of item 4 of this Schedule, a tax invoice issued
by an exempt person shall contain the following particulars:
( a ) an identifying number of the invoice;
( b ) the date of supply;
( c ) the name, address and Value Added Tax registration number of the
supplier, and, near or immediately beneath the said registration number,
the words "Exempt Person";
( d ) the name, address and Value Added Tax registration number of the
person to whom the supply is made;
( e ) the type of the supply by reference to the categories listed in item 3 of
this Schedule;
( f ) a description sufficient to identify the goods or services supplied;
  76  CAP. 406. _h    VALUE ADDED TAX 
( g ) for each description, the quantity of the goods or the extent of the
services, and the price payable expressed in liri;
( h ) the total price payable expressed in liri, before any cash discounts;
( i ) the rate of any cash discount offered.
Categories of supplies
3. The categories referred to in sub-paragraph ( e ) of paragraphs (1) and (2) of
item 2 of this Schedule are:
( a ) a supply by sale;
( b ) a supply of goods under a hire-purchase agreement or in terms of which
the ownership of the goods is deferred;
( c ) a supply on hire;
( d ) a supply under a contract of exchange;
( e ) a supply of goods made from materials provided by the customer; 
( f ) a supply by sale on commission;
( g ) a supply on sale or return or similar terms; 
( h ) any other supply.
Tax invoice by retailers
4. A tax invoice which is required to be provided by a retailer need contain
only the following particulars:
( a ) a serial number of the transaction;
( b ) the date of the supply;
( c ) the name, address and the Value Added Tax registration number of the
supplier;
( d ) the Value Added Tax registration number of the person to whom the
supply is made;
( e ) a description sufficient to identify the goods supplied;
( f ) for each description, the quantity of the goods, the rate of tax
chargeable thereon, and the price payable expressed in liri, including
the tax;
( g ) the total amount of tax chargeable expressed in liri:
Provided that a fiscal receipt issued by means of a fiscal cash register as
defined in the Fourteenth Schedule to this Act, shall be deemed to satisfy the
requirements of this item if it contains in addition to the particulars required by the
said items the machine-printed registration number of the person to whom the
relative supply is made.
Invoice for exempt supply
5. Where a registered person provides an invoice containing the particulars
prescribed in item 2 or item 4 of this Schedule and specifies thereon any goods or
services which are subject of an exempt supply, he shall distinguish on the invoice
between exempt supplies and taxable supplies and shall distinguish exempt supplies
referred to in the First Part of the Fourth Schedule to this Act from other exempt
VALUE ADDED TAX _g CAP. 406.  77
supplies.
Reverse charge
6. In the case of a supply of services to which article 65 refers, the person who
is deemed to make that supply in terms of the said article shall indicate the words
"self-reverse charge" in lieu of the information required by sub-paragraph ( d ) of
paragraphs (1) or (2) of item 2 of this Schedule.
Special cases
7. This Schedule shall be without prejudice to any provisions which may be
prescribed in special cases.
_gArticle 50 (4_h)
Fiscal Receipts
Interpretation
1. In this Schedule, unless the context otherwise requires -
"fiscal cash register" means a cash register which conforms with the requirements
specified in item 12 of this Schedule;
"fiscal taxi meter" means a taxi meter which complies with requirements specified
in item 13 of this Schedule;
"fiscal receipt" means a receipt or invoice issued on a form supplied or approved
in writing by the Commissioner and containing all the information and details
required to be specified thereon in accordance with the said form, or a receipt issued
by means of a fiscal cash register, or by a fiscal taxi meter.
Obligation to issue receipt
2. Subject to the other provisions of this Schedule, every registered person who
makes a taxable supply or a supply referred to in Part One of the Fourth Schedule to
the Act (exempt with credit supply) and every person who is classified as an exempt
person who makes a supply which would qualify as a taxable supply had such supply
been made by a person who is not so classified shall, except where he is required to
issue a tax invoice in respect of that supply, issue a fiscal receipt in accordance with
this Schedule for the consideration paid to him for that supply and such fiscal receipt
shall, unless issued before the payment is made, be issued and delivered to the
person who effects the payment or to the person to whom the supply is made
immediately after payment has been effected, to the extent covered by that payment:
Provided that in respect of a supply for which no consideration is paid but
which is deemed to have been made for a consideration in accordance with the
FOURTEENTH SCHEDULE Amended by:L.N. 21 of 1999;
L.N. 201 of 1999;
L.N. 94 of 2001.
  78  CAP. 406. _h    VALUE ADDED TAX 
Second Schedule to this Act, the fiscal receipt shall be issued on the date of that
supply.
Receipt issued by a fiscal cash register
3. (1) Subject to the provisions of items 4, 5 and 6 of this Schedule, a fiscal
receipt issued by a person who is a retailer or whose business includes supplies of
food referred to in item 2 of Part Three of the Fourth Schedule to the Act shall be
issued by means of a fiscal cash register: provided that in respect of any supply made
by such person in any period during which he is unable, for a reasonable cause, to
issue a fiscal receipt by means of a fiscal cash register, he shall issue a fiscal receipt
on a form supplied by the Commissioner.
(2) A receipt which is required to be issued for the provision of a taxi
service shall be issued by means of a fiscal taxi meter: provided that in respect of
any supply made by such person in any period during which he is unable, for a
reasonable cause, to issue a fiscal receipt by means of a fiscal taxi meter, he shall
issue a fiscal receipt on a form supplied by the Commissioner.
(3) For the purposes of paragraphs (1) and (2) of this item, the following
shall not be deemed to constitute a reasonable cause:
( a ) not being in possession of a fiscal cash register or a fiscal taxi meter; 
( b ) not being in possession of stationery or other material required for the
functions of the fiscal cash register or a fiscal taxi meter;
( c ) defects in the functioning of a fiscal cash register or a fiscal taxi meter
except where prompt and reasonable measures have been taken to
remedy such defects.
Door to door sales of gas, milk or bread
4. (1) A person who makes supplies from a vehicle consisting in door-to-
door delivery, or in the delivery to the public on a public road, of gas, milk and milk
products or bread shall not be required to issue a fiscal receipt for every such supply
if he issues one fiscal receipt (hereinafter in this item referred to as "a daily receipt")
which accounts for all the said supplies made on each day in the manner prescribed
in the other provisions of this item.
(2) A daily receipt shall be a fiscal receipt which accounts for the
difference between the goods loaded on the vehicle from which the said supplies are
made and the goods remaining on the vehicle after the said supplies are made for that
day as if such difference goods supplied in one supply.
(3) A   person who issues daily receipts shall keep the originals therefor
together with the other records he is required to keep for the purposes of this Act.
(4) A person who issues daily receipts shall be required to issue fiscal
receipts in accordance with the other items of this Schedule in respect of any
supplies not referred to in this item.
Supplies of bread by bakers.
5. (1) A person who makes supplies of bread from the bakery where that
bread has been baked may apply in writing to the Commissioner for authorisation to
issue one fiscal receipt (hereinafter in this item referred to as "a daily fiscal
receipt"), which daily fiscal receipt  shall account for all the said supplies made on
each day in the manner prescribed in the other provisions of this item.
VALUE ADDED TAX _g CAP. 406.  79
(2) A daily fiscal receipt shall be a fiscal receipt which accounts for all the
separate supplies of that day as if such goods were supplied in one separate supply.
(3) The Commissioner may, by notice in writing, at any time withdraw
such authorisation without giving reasons.
(4) A person who issues daily fiscal receipts shall keep the originals
thereof together with the other records he is required to keep for the purposes of this
Act.
(5) A person who issues daily receipts shall be required to issue fiscal
receipts in accordance with the other items of this Schedule in respect of any other
supplies not referred to in this item, unless such other supplies refer to relatively
small amounts.
Supplies from pumps of leaded petrol, unleaded petrol and diesel (gas) oil.
6. (1) A person who makes supplies from pumps, other than automated
pumps, of leaded petrol, unleaded petrol and diesel (gas) oil, shall not be required to
issue a fiscal receipt for every such supply if he issues one fiscal receipt (hereinafter
in this item referred to as ''a daily receipt'') which accounts for all the supplies made
on each day in the manner prescribed in the other provisions of this item. 
(2) A daily receipt shall be a fiscal receipt which accounts for all the said
supplies of that day as if such goods were supplied in one supply.
(3)  A person who issues daily receipts shall keep the originals thereof
together with the other records he is required to keep for the purposes of this Act.
(4) A person who issues daily receipts shall be required to issue fiscal
receipts in accordance with the other items of this Schedule in respect of any
supplies not referred to in this item.
Supplies of food and beverages by a canteen situated in a work or study area.
7. (1) A person who makes a supply of food and beverages in a canteen
situated in a work or study area may apply in writing to the Commissioner for
authorisation to issue one fiscal receipt in respect of the supply of food and another
fiscal receipt in respect of the supply of beverages (each such receipt hereinafter in
this item referred to as ''a daily receipt'') which daily receipt shall account for the
said separate supplies made on each day in the manner prescribed in the other
provisions of this item.
(2) The daily receipts shall be the fiscal receipts which account for all the
said separate supplies of that day as if such goods were supplied in two separate
supplies, one in respect of food and one in respect of beverages.
(3) The Commissioner may, by notice in writing, at any time withdraw
such authorisation without giving reasons.
(4)  A person who issues daily receipts shall keep the originals thereof
together with the other records he is required to keep for the purposes of this Act.
(5) A person who issued daily receipts shall be required to issue fiscal
receipts in accordance with the other items of this Schedule in respect of any
supplies not referred to in this item.
  80  CAP. 406. _h    VALUE ADDED TAX 
Supplies of goods by means of vending machines
8. (1) A fiscal receipt in respect of supplies of goods made by means of a
vending machine shall account for the difference in the goods stocked in the machine
every time and immediately after goods are loaded therein and the goods stocked in
the machine immediately before goods are loaded again therein as if that difference
represented goods supplied in one supply: provided that the first receipt to be made
in accordance with this item by a person who is a registered person on the 1st
January, 1999 shall account for the difference in the goods stocked in the machine on
the 1st January 1999 and the goods stocked therein immediately before the first time
in 1999 that goods are loaded therein.
(2) A person who makes supplies of goods by means of a vending machine
shall take readings of stocks every time goods are loaded into machine and shall
keep a record of such readings and the original of all receipts issued in accordance
with this item together with the other records he is required to keep for the purposes
of this Act.
Services supplied by means of machines
9. (1) A fiscal receipt in respect of supplies of services made by means of a
machine operated by coins shall be issued every time coins are withdrawn from the
machine, and shall account for the value of the coins so withdrawn as if that value
represented the value of services supplied in one supply.
(2) A person who makes supplies referred to in paragraph (1) of this item
shall keep a record of coins withdrawn from and of coins and goods stocked by him
(if any) in the machine, and shall keep the original of all receipts issued in
accordance with the said paragraph together with the other records he is required to
keep for the purposes of this Act.
(3) A fiscal receipt in respect of supplies of services made by means of a
machine operated by an electronic card or by any other token shall be issued every
time a card or other token is supplied and shall account for the price charged or
chargeable for the supply of that card or token as if the supply of the card or other
token represented the supply of services that can be supplied by the use of that card
or other token.
Accounting for fiscal receipt supplied or approved by the Commissioner
10. (1) Every person who is supplied with forms of fiscal receipts by the
Commission shall account for all such forms by keeping in his possession, and
producing at the request of the Commissioner, all unused forms, and by keeping one
copy and producing to the Commissioner another copy of all receipts drawn out on
such forms and of all cancelled forms.
(2) Copies of used and cancelled forms of fiscal receipts supplied by the
Commissioner shall be delivered to the Commissioner as soon as possible after the
booklet or other form of binding in which the fiscal receipts have been supplied has
been fully used or at such other date as the Commissioner may require.
(3) Every person who issues fiscal receipts on forms approved by the
Commissioner shall account for all such forms in such manner as may be directed by
the Commissioner, and for this purpose the Commissioner may give such directions
regarding the processing, recording and storing of the forms and of the information
to be given therein as he may deem appropriate.
VALUE ADDED TAX _g CAP. 406.  81
(4) Any person who fails to account for a form of fiscal receipt in the
manner prescribed in this item shall be presumed, unless the contrary is proved, to
have failed to account for a taxable supply.
Exemption from obligation to issue fiscal receipt
11. (1) The Commissioner may, by means of a notice in writing, exempt any
person, and may by means of a notice published in the Gazette exempt any class of
persons from any obligation imposed by this Schedule, and such exemption may be
given for such time and with such limitations and subject to such conditions as may
be specified in the said notice.
(2) The Commissioner may at any time by means of a notice in writing or
by means of a notice published in the Gazette, as the case may be, revoke any
exemption given in terms of this item.
Obligation to retain and produce receipt
12. Every person to whom a fiscal receipt is issued shall retain the receipt in his
possession for a period of twenty-four hours and shall, upon a request made during
the said time by the Commissioner or any officer authorized by the Commissioner,
produce the said receipt to the Commissioner or such authorized officer.
Fiscal cash register
13. (1) A fiscal cash register shall -
( a ) cater for the functions listed in paragraph (2) of this item; and
( b ) be of a type specifically approved by the Commissioner by means of a
notice published in the Gazette or approved for the purposes of and in
accordance with the Customs and Excise Tax Act *  or the Value Added
Tax Act, 1994.
(2) The functions for which a fiscal cash register must cater for the
purpose of sub-paragraph ( a ) of paragraph (1) of this item are:
( a ) printing of an itemised receipt for the supplies made in each transaction
indicating -
(i) the name and address of the supplier and the Value Added Tax
registration number,
(ii) the goods or services supplied,
(iii) the quantity of each item supplied,
(iv) whether each item is taxable or exempt,
(v) the total, inclusive of tax, of the consideration paid for the
supplies included in the transaction,
(vi) serial number of transaction,
(vii) the tax logo type as specified by the Commissioner,
(viii) cash register serial number,
(ix) date and time of supply,
(x)  and/or such other details as the Commissioner may require;
*Repealed by this Act.
  82  CAP. 406. _h    VALUE ADDED TAX 
( b ) registering of all day-to-day transactions on a printed journal;
( c ) storing of predefined data in an inaccessible and unalterable memory.
Fiscal taxi meter
14. (1) A fiscal taxi meter shall -
( a ) cater for the functions listed in paragraph (2) of this item; and
( b ) be of a type specifically approved by the Commissioner by means of a
notice published in the Gazette.
(2) The functions for which a fiscal taxi meter must cater for the purposes
of sub-paragraph ( a ) of paragraph (1) of this item are:
( a ) the printing of a receipt indicating:
(i) the name and taxi registration number of the supplier and the
Value Added Tax registration number;
(ii) the total, inclusive of tax, of the consideration paid for the
service;
(iii) the serial number of the transaction;
(iv) the tax logo type as supplied by the Commissioner;
(v) fiscal taxi meter serial number;
(vi) date and time of the supply;
(vii) and/or such other details as the Commissioner may require;
( b ) registering of all day-to-day transactions on a printed journal;
( c ) storing of predefined data in an inaccessible and unalterable memory.
SPECIAL CASES
Part A
Professional Services
Interpretation
1. In this Schedule -
"professional services" means any of the services specified in item 10 of this
Part;
"fiscal receipt" has the meaning assigned to it in the Fourteenth Schedule to
this Act.
Amended by:
L.N. 22 of 1999;
L.N. 30 of 1999;
L.N. 223 of 1999;
L.N. 271 of 2000;
L.N. 149 of 2001;
L.N. 234 of 2001.
FIFTEENTH SCHEDULE
_gArticle 57_h
VALUE ADDED TAX _g CAP. 406.  83
Time of supply
2. (1) Subject to the other provisions of this Part, a supply of professional
services shall be treated as taking place at the earlier of:
( a ) the date when a tax invoice or a fiscal receipt, as the case may be, is
issued for the said supply, to the extent covered by that invoice or
receipt; and
( b ) the date when a payment is made for that supply, to the extent covered
by that payment.
(2) Professional services performed by a taxable person before the 1st
January, 1999, shall be treated as supplied on the date on which they were
performed.
(3) When a payment is made before the 1st January, 1999, for professional
services performed by a registered person on or after that date, those services shall
be treated as supplied on the 1st January, 1999.
(4) The date of supply of professional services determined in accordance
with the provisions of this Part shall also be deemed to be the date of supply of those
services for the purposes of the Customs and Excise Tax Act * .
Date when services are performed
3. (1) The services of an advocate or of a legal procurator in assisting any
party to judicial proceedings shall be treated as performed -
( a ) where the judicial proceedings have been instituted before the 1st
January, 1999 and the final decree or judgment is delivered on or before
the 30th June, 1999, on a date preceding the 1st January, 1999;
( b ) in any other case, on the date when a final decree or judgment in those
proceedings is delivered by the court in which the proceedings have
been instituted (services relating to proceedings instituted in different
courts being treated as supplied separately) or, when the advocate or
legal procurator abandons or is abandoned by his client at an earlier
date, on such earlier date.
(2) The services of a judicial referee or of an expert appointed by a court
or by a tribunal set up by law shall be treated as performed -
( a ) where the appointment of the referee or expert has been made before the
1st January, 1999 and the report is filed or made on or before the 30th
June, 1999, on a date preceding the 1st January, 1999;
( b ) in any other case, on the date on which the report is filed in or made to
the court or tribunal or, when the appointment is terminated on an
earlier date, on such earlier date.
(3) The services of an arbitrator shall be treated as performed -
( a ) where the appointment of the arbitrator has been made before the 1st
January, 1999 and the award is made on or before the 30th June, 1999,
on a date preceding the 1st January, 1999;
( b ) in any other case, on the date of the award or, when the appointment is
terminated on an earlier date, on such earlier date.
*Repealed by this Act.
  84  CAP. 406. _h    VALUE ADDED TAX 
(4) ( a ) Subject to the provisions of paragraph ( b ) of this item work carried out
before the 1st January, 1999 by a public auditor for the purpose of making a report
on the accounts for a financial year commencing before the said date shall be treated
as constituting a supply of services performed before the said date.
( b ) When a payment for any services performed by a public auditor for the
purpose of making a report on the accounts for a financial year ending on or after the
1st January, 1999 is made after the 30th June, 1999, the said services shall be treated
as having been wholly performed after the 1st January,1999.
Free Supply 
4. When no consideration is paid or payable for a supply of professional
services and where that supply is to be treated as a taxable supply made for a
consideration pursuant to the provisions of the Second Schedule to this Act, the date
of the said supply shall be determined in accordance with the provisions of the Act
without any reference to this Part.
Invoices and receipts for professional services
5. (1) Where a tax invoice is required to be issued for a supply of
professional services, it shall be issued by not later than thirty-one days from the
date on which payment for the said supply of services is made, to the extent covered
by that payment:
Provided that in the case of a supply to which item 4 of this Part refers, the
tax invoice shall be issued within thirty-one days from the date on which the services
are performed.
(2) Where a fiscal receipt is required to be issued for a supply of
professional services it shall, unless it has been issued before the payment has been
made, be issued and delivered to the person who effects the payment or to whom the
services have been supplied, immediately after payment has been effected, to the
extent covered by that payment:
Provided that in the case of a supply to which item 4 of this Part refers, the
fiscal receipt shall be issued on the date when the services are performed.
(3) A tax invoice or a fiscal receipt which includes fees for the supply of
professional services shall not include fees for any other supply.
Tax on services where tariffs of fees are established by law
6. (1) The tax chargeable on a supply of professional services shall be an
amount over and above the amount resulting to be chargeable for those services in
terms of any tariff of fees established under any law in force in Malta.
(2) Nothing in this item shall be construed as requiring any person
required by law to assess or declare the fees payable in accordance with any such
tariff to declare or assess also the said tax.
(3) In any action for the enforcement of the executive title referred to in
article 253( c ) of the Code of Organization and Civil Procedure, the amount for
which payment may be enforced shall be the amount shown in the taxed bill of costs
in question increased by any tax chargeable on the supply of professional services to
which the taxed bill of costs refers as evidenced by a tax invoice or a fiscal receipt or
a certified copy thereof attached to the said bill.
VALUE ADDED TAX _g CAP. 406.  85
(4) The provisions of paragraph (3) of this item shall be without prejudice
to the right of the debtor to request the delivery of the original tax invoice or the
fiscal receipt in accordance with item 7 of this Part.
Tax claimed from third parties
7. The provisions of this item shall reply with respect to any action for the
payment of fees for professional services brought against any person other than the
person to whom the services were supplied:
( a ) the person against whom the action is brought shall not be bound to pay
the amount relating to the tax, if any, chargeable on the supply of the
said services unless the original tax invoice or fiscal receipt for those
services complying with the provisions of paragraph ( b ) of this item is
delivered to him, or, where the action is brought against a number of
persons jointly, to any one of them;
( b ) a tax invoice or fiscal receipt delivered as aforesaid shall, in addition to
the information required by the Act, contain -
(i) the following declaration signed by the person to whom the said
services were rendered:
"I declare that no credit for input tax has been or will be
claimed by me in respect of the professional services referred to
in this tax invoice/ fiscal receipt.";
(ii) where the person against whom the action or claim is brought is a
registered person, or, where the action is brought against a
number of persons jointly, when any one of them is a registered
person, the name and Value Added Tax registration number of the
said registered person;
( c ) when a tax invoice or fiscal receipt for fees for professional services
complying with the provisions of paragraph ( b ) of this item is delivered
to a registered person who is bound at law to pay or reimburse the said
fees it shall for the purposes of this Act be treated as if it were a tax
invoice for professional services supplied to him.
Option to adopt invoice basis
8. (1) Any person who supplies professional services may request the
Commissioner to authorize him to account for the time of supplies made by him in
the manner provided for in the Act without any reference to this Part, and any person
who has been so authorized may request the Commissioner to authorize him to
account for the time of supplies in accordance with this Part.
(2) The Commissioner may refuse to grant an authorization requested in
accordance with paragraph (1) of this item for any reason he deems appropriate or
without assigning any reason and may grant such an authorization subject to such
conditions as he may deem fit to impose, including the payment of any amount
determined by him to represent any tax which, in view of the change in the manner
of accounting for the tax, might otherwise remain unaccounted for.
Applicability of the Act
9. Save as otherwise provided in this Part, the provisions of this Act and of any
regulations made under this Act shall apply to supplies of professional services.
  86  CAP. 406. _h    VALUE ADDED TAX 
Services
10. This part applies to -
(1) Services performed by a person holding a warrant issued under any
law in force in Malta to practise a profession acting in an independent capacity in the
exercise of that profession.
(2) Services of a group of persons holding a warrant issued under any law
in force in Malta to practise a profession whether associated in a partnership or not
but excluding a commercial partnership.
(3) Services performed by an arbitrator pursuant to a submission for
arbitration made in conformity with article 970(1) of the Code of Organization and
Civil Procedure.
(4) Services performed by a judicial referee or an expert appointed by a
court or by a tribunal set up by law.
Part B
Articles 57 and 75
Second-hand goods, works of art, collectors’ items and antiques
Interpretation
1. In this Part unless the context otherwise requires:
(1) "works of art" means -
( a ) paintings, drawings and pastels executed by hand, other than hand-
painted or hand-decorated manufactured articles;
( b ) original engravings, prints and lithographs produced in limited
numbers;
( c ) original sculptures and statuary, in any material, and sculpture casts the
production of which is limited to eight copies;
( d ) tapestries and wall textiles made by hand from original designs
provided by artists provided that there are not more than eight copies of
each.
(2) "collectors’ items" means -
( a ) postage or revenue stamps, postmarks, first day covers, pre-stamped
stationery and the like, franked, or if unfranked not being of legal tender
and not being intended for use as legal tender;
( b ) collections and collectors’ pieces of zoological, botanical,
mineralogical, anatomical, historical, archaeological, palaeontological,
ethnographic or numismatic interest.
(3) "antiques" means objects other than works of art or collectors’ items
which are more than 100 years old.
(4) "second-hand goods" means tangible movable property that is suitable for
VALUE ADDED TAX _g CAP. 406.  87
further use as it is or after repair, other than works of art, collectors’ items or
antiques and other than precious metals or precious stones.
(5) "second-hand goods dealer" means a registered person who, in the course of
his economic activity, purchases or acquires for the purposes of his undertaking, or
imports with a view to resale, second-hand goods and/or works of art, collectors’
items or antiques, whether that registered person is acting for himself or on behalf of
another person pursuant to a contract under which commission is payable on
purchase or sale.
(6) "auctioneer" means any registered person who, in the course of his economic
activity, offers goods for sale by public auction with a view to handing them over to
the highest bidder.
(7) "principal of an auctioneer" means any person who transmits goods to an
auctioneer under a contract under which commission is payable on a sale subject to
the following provisions -
( a ) the auctioneer offers the goods for sale in his own name but on behalf of
his principal;
( b ) the auctioneer hands over the goods, in his own name but on behalf of
his principal, to the highest bidder at a public auction.
Second-hand goods dealer
2. A second-hand goods dealer who makes supplies of second-hand goods,
works of art, collectors’ items and antiques, shall charge and collect VAT on the
profit margin, in accordance with the other provisions of this Part.
Supplies
3. The supplies of goods referred to in item 2 of this Part shall be supplies of
second-hand goods, works of art, collectors’ items and antiques,  made by a second-
hand goods dealer, which had been supplied to him in Malta -
( a ) by a non-registered person; or
( b ) by another registered person, in so far as the supply of goods by that
other registered person is an exempt supply in terms of Part Two of the
Fourth Schedule to the Act; or
( c ) by another registered person, in so far as that other registered person is
classified as an exempt person and involves capital assets; or
( d ) by another second-hand goods dealer, in so far as the supply of goods
by that other second-hand goods dealer was subject to value added tax
in accordance with the other provisions of this Part.
Taxable Value
4. (1) The taxable value of the supplies of goods referred to in item 3 of this
Part shall be the profit margin made by the second-hand goods dealer less the
amount of value added tax relating to the profit margin.  That profit margin shall be
equal to the difference between the selling price charged by the second-hand goods
dealer for the goods and the purchase price.
(2) For the purposes of paragraph (1) of this item -
  88  CAP. 406. _h    VALUE ADDED TAX 
( a ) "selling price" means everything which constitutes the consideration
which has been, or is to be, charged by the second-hand goods dealer to
the purchaser, including subsidies directly linked to that transaction,
taxes, duties, levies and charges and incidental expenses such as
commission, packaging, transport and insurance costs charged by the
second-hand goods dealer to the purchaser but excluding discounts and
repayment for expenses paid out in the name and for the account of the
purchaser;
( b ) "purchase price" means everything which constitutes the consideration
as defined in subparagraph (a) of this paragraph, paid, or to be paid, by
the second-hand goods dealer to his supplier.
Applicable option
5. (1) Second-hand goods dealers shall have the option to apply the provisions
of this Part, after having obtained the approval in writing of the Commissioner, in
respect of supplies of -
( a ) works of art, collectors’ items or antiques which they have imported
themselves;
( b ) works of art supplied to them by their creators or their successors in
title.
(2) Where a second-hand goods dealer exercises the option available under
paragraph (1) of this item, such option shall cover, at least, two calendar years.
(3) Where a second-hand goods dealer exercises the option available under
paragraph (1) of this item, the taxable value shall be determined in accordance with
item 4 of this Part.  Where the supplies refer to supplies to which subparagraph ( a ) of
paragraph (1) of this item refers, the purchase price to be taken into account in
calculating the profit margin shall be equal to the taxable value on importation, plus
the value added tax due or paid on importation.
Input Tax
6. (1) Registered persons shall not be entitled to deduct the value added tax
due or paid in respect of goods which have been, or are to be, supplied to them by
second-hand goods dealers, where the supply of those goods has been subject to the
provisions of this Part. 
(2) Where the second-hand goods dealer accounts for value added tax in terms
of the provisions of this Part, he shall not be entitled to claim back -
( a ) value added tax due or paid in respect of works of art, collectors’ items
or antiques which he has imported himself;
( b ) value added tax due or paid in respect of works which have been, or are
to be supplied, to him by their creators or their successors in title;
( c ) value added tax due or paid in respect of works of art which have been,
or are to be, supplied to him by a registered person other than a second-
hand goods dealer.
Separate accounting
7. Where a second-hand goods dealer makes supplies to which this Part refers
and other supplies, he must keep separate accounts to distinguish between the
VALUE ADDED TAX _g CAP. 406.  89
supplies made to which this Part refers and those other supplies.
Purchase invoice
8. Where a supply of second-hand goods to a second-hand goods dealer has
been made by a person who had not supplied the said goods in the course of an
economic activity, such dealer shall issue a purchase invoice at the time when the
said goods have been supplied to him, containing the following information -
( a ) the purchase invoice number;
( b ) the date of the purchase;
( c ) the name and address of the seller;
( d ) the name and address of the purchaser;
( e ) a description of the goods;
( f ) the total price paid;
( g ) a cross reference to the entry of the transaction in the purchaser’s
account books;
( h ) the signature of the seller.
Sales invoice
9. A second-hand goods dealer who makes any supply to which this Part refers
shall not issue a tax invoice or any other document showing an amount as being tax
or as being attributed to tax, but shall issue a sales invoice containing the following
information and shall keep a copy thereof -
( a ) the sales invoice number;
( b ) the date of the sale;
( c ) the name, address and value added tax registration number of the seller;
( d ) the name and address of the purchaser;
( e ) a description of the goods;
( f ) the total price inclusive of tax;
( g ) a cross reference to the entry of the transaction in the seller’s account
books;
( h ) the following declaration signed by the seller: "I declare that no credit
for input tax has or will be claimed by me in respect of the goods sold
on this invoice."
Option available for second-hand goods dealers
10. (1) A second-hand goods dealer may account for value added tax in terms
of the other provisions of the Act to any supply to which items 2 and 3 of this Part
refer, without any reference to this Part.
(2) Where a second-hand goods dealer so opts in respect of -
( a ) the supply of works of art, collectors’ items or antiques which he has
imported himself, he shall be entitled to claim back the value added tax
due or paid on the importation of those goods;
( b ) the supply of works of art supplied to him by their creator, he shall be
  90  CAP. 406. _h    VALUE ADDED TAX 
entitled to claim back the value added tax due or paid for the work of art
supplied to him;
( c ) the supply of works of art supplied to him by a registered person other
than a second-hand goods dealer, he shall be entitled to claim back the
value added tax due or paid for the work of art supplied to him;
(3) The right to claim back input tax on supplies to which paragraph (1) of this
item refers shall arise at the time of submitting the value added tax return. 
Sales by public auction
11. (1) Where an auctioneer makes a supply of second-hand goods, works of
art, collectors’ items or antiques by public auction, acting in his own name, pursuant
to a contract under which commission is payable on the sale of those goods by public
auction, on behalf of -
( a ) a non-registered person; or
( b ) another registered person in so far as the supply of goods by that other
registered person is made pursuant to a contract under which
commission is payable on purchase or sale and is an exempt supply in
terms of Part Two of the Fourth Schedule to the Act; or
( c ) another registered person in so far as the supply of goods by that other
registered person involves capital assets and is made pursuant to a
contract under which commission is payable on purchase or sale and in
so far as such other registered person is classified as an exempt person;
or
( d ) another second-hand goods dealer, in so far as the supply of goods by
that other second-hand goods dealer is made pursuant to a contract
under which commission is payable on purchase or sale and is subject to
value added tax in terms of the other provisions of this Part;
The taxable value of each supply of goods shall be that specified in the other
paragraphs of this item.
(2) The taxable value of each supply of goods to which paragraph (3) of this
item applies is the total amount invoiced to the purchaser by the auctioner in
accordance with paragraph (4) of this item, less -
( a ) the net amount paid or to be paid by the auctioneer to his principal,
determined in accordance with paragraph (3) of this item, and
( b ) the amount of the tax due by the auctioneer in respect of that supply.
(3) The net amount paid or to be paid by the auctioneer to his principal shall be
equal to the difference between -
( a ) the price of the goods at the public auction, and
( b ) the amount of the commission obtained or to be obtained by the
auctioneer from his principal, under the contract whereby commission is
payable on the sale.
(4) An auctioneer must issue to the purchaser a sales invoice containing the
following information -
( a ) the sales invoice number;
( b ) the date of the sale;
( c ) the name, address and value added tax registration number of the seller;
VALUE ADDED TAX _g CAP. 406.  91
( d ) the name and address of the purchaser;
( e ) a description of the goods;
( f ) the auction price of the goods;
( g ) taxes, dues, levies and charges;
( h ) incidental expenses such as commission, packing, transport and
insurance costs charged by the auctioner to the purchaser;
( i ) reference to the entry of the transaction in the seller’s account books;
( j ) the following declaration signed by the seller: "I declare that no credit
for input tax has or will be claimed by me in respect of the goods sold
on this invoice.".
The sales invoice shall not show any amount of value added tax separately.
(5) The auctioneer to whom the goods were transmitted under a contract
whereby commission is payable on a public auction sale must issue an invoice to his
principal, containing the following information:
( a ) a consecutive invoice number;
( b ) the date of the transaction;
( c ) the name and address of the principal;
( d ) the name, address and value added tax registration number of the
auctioneer;
( e ) a description of the goods;
( f )  the amount of the transaction (i.e. the auction price of the goods less
the amount of commission obtained or to be obtained from the
principal;
( g ) the signature of the principal:
Provided that where the principal is a registered person, the invoice so
drawn up shall serve as the tax invoice required to be issued in terms of the
Thirteenth Schedule to the Act.
(6) Auctioneers who supply goods under the conditions laid down in paragraph
(1) of this item, must indicate in the suspense account of their accounts -
( a ) the amounts obtained or to be obtained from the purchaser of the goods;
( b ) the amount reimbursed or to be reimbursed to the vendor of the goods.
The above amounts must be substantiated by the relevant documentation.
(7) The supply of goods by an auctioneer shall be deemed to be made at the time
when the sale of those goods by public auction is effected.
Repossessed goods
12. Where any goods are repossessed -
( a ) under the terms of a finance agreement, or
( b ) by any insurer in the settlement of a claim under an insurance policy, or
( c ) by a mortgagee in terms of his rights under a mortgage over a ship or
aircraft,
and supplied by the person who repossessed them in the same condition as they were
in at the time they were repossessed, the said supply by that person shall be treated
  92  CAP. 406. _h    VALUE ADDED TAX 
as neither a supply of goods nor as a supply of services.
Part C
_gArticle 57 (2)( c )( e )_h
Supplies by Retailers and by Civil, Mechanical and Electrical Engineering 
Contractors
1. This Part applies to: 
( a ) retailers;
( b ) civil, mechanical and electrical engineering contractors.
2. The Commissioner may direct that the time of supplies made by or to a
registered person to whom this Part applies shall be the time whenever a payment is
made or received, as the case may be, for any such supplies, to the extent of every
such payment, and that the taxable value of such supplies shall be determined by
reference to every such payment made or received.
3. A direction in terms of item 2 of this Part shall be given by notice in writing
or by a notice published in the Gazette, and may, by such notice, be amended or
withdrawn. Unless otherwise specified, such a direction shall apply to all supplies
made by or to the person to whom it is made with effect from the date of the said
direction until that direction is withdrawn.
4. When a direction given in terms of item 2 of this Part is amended or
withdrawn the Commissioner may require the person to whom it had been given to
pay tax in such amount as the Commissioner may deem fair and reasonable to
compensate for the tax on supplies which, because of the amendment or withdrawal,
might otherwise remain unaccounted for and such tax shall be deemed for all the
purposes of this Act to be tax chargeable on taxable supplies made by that person on
the date that the amendment or withdrawal becomes effective.
5. Notwithstanding the other provisions of this Part a direction given in terms
of item 1 of this Part shall not apply to any supply referred to in items 4, 5 and 8 of
the Second Schedule to this Act.
Part D
_gArticle 57 (2)( a )_h
Travel Agents
Interpretation
1. In this Part "travel agent" has the same meaning as is assigned to it by article
2 of the Malta Travel and Tourism Services Act, or in any other Act which may be
substituted therefor, and shall include a tour operator: provided that when applied to
a person established outside Malta, this definition shall be construed as if the
reference to a licence were omitted.
VALUE ADDED TAX _g CAP. 406.  93
Application
2. The provisions of this Part shall apply to the operations of travel agents,
where the travel agent deals with the customer in his own name and uses the supplies
and services of other persons in the provision of travel facilities:
Provided that this Part shall not apply to a travel agent who acts only as an
intermediary and merely makes a repayment of expenses to another person in the
name and for the account of the traveller.
Services supplied to be deemed as a single transaction
3. All transactions performed by a travel agent for the benefit of the traveller in
connection with the journey shall be treated as a single supply of services supplied
by him to the traveller.
Place of supply
4. The place of supply of a travel agent shall be the place where he is
established.
Taxable value
5. The taxable value of supplies referred to in item 3 of this Part made by a
travel agent shall be the difference between the cost of those supplies to the travel
agent inclusive of value added tax and the total price charged to the traveller
exclusive of value added tax, where the supplies are for the direct benefit of the
traveller:
Provided that where a supply to a travel agent is required in terms of this Act
to be supported by a tax invoice, the cost of that supply shall only be taken into
account for the purposes of this item if the travel agent holds such a tax invoice.
Input tax
6. Value added tax charged to the travel agent by other registered persons on
supplies made by those registered persons to the travel agent for the direct benefit of
the traveller shall not be eligible for deduction or refund.
Powers of the Commissioner
7. The Commissioner may give such directives to, and require such
information from, a travel agent as he may deem necessary for the application of this
Part.
Records
8. A travel agent shall keep, in addition to the records required to be kept in
terms of the other provisions of this Act, such other records as may be necessary to
readily ascertain the amount of tax chargeable under this Part.
  94  CAP. 406. _h    VALUE ADDED TAX 
Part E
(Article 57 and 75)
Tax in Danger
1. Where, in any particular contract of supply, and in order to secure the
regular payment of the tax in terms of the Act, the Commissioner may, by a notice in
writing to the parties to the contract direct that the person to whom the supply is
made shall be deemed to have made that supply to himself in the course or
furtherance of his economic activity and the provisions of the Act, including the
obligation to account for and to pay the tax, shall be read and construed accordingly.
2. When a direction to which item 1 of this Part refers has been given by the
Commissioner, the person to whom the supply is made shall keep, in addition to the
records required to be kept in terms of the other provisions of the Act, such other
records as may be necessary to ascertain the amount of tax payable under this Part.
3. When a direction has been given by the Commissioner in terms of item 1 of
this Part, the tax invoice which is required to be issued in terms of the Act by the
person who makes the supply shall, in lieu of the information required by item
2(1)(j) of the Thirteenth Schedule to the Act, indicate the words "direction in terms
of the Fifteenth Schedule to the Act".
4. When a direction has been given by the Commissioner in terms of item 1 of
this Part, such direction shall not in any way limit the right to claim any input tax to
which any of the persons to whom the direction has been given, may still be entitled
to claim in accordance with the other provisions of the Act.
