New Reduced Vat Rate of 12%


On the 6th of October 2023, a new reduced VAT rate was introduced, through an amendment to the Eighth Schedule to the VAT Act.

The 12% reduced rate shall apply from the 1st of January 2024 on the following services:

1. Custody and management of securities.

2. Management of credit and credit guarantees by a person or body other than those who granted the credit.

3. Hiring of a pleasure boat to a person according to an agreement for any term or part of a term that, when added to the term of a previous hiring, of the same goods or of other goods of the same kind, to the said person during the previous twelve (12) months ending on the date of the beginning of the existing hiring, does not exceed five (5) weeks.

4. Services consisting of the care of the human body required to be delivered by a person in the exercise of any profession regulated by the Health Care Professions Act (Cap.464), including services supplied in the course of a health studio business or similar business, but not including exempt supplies (in terms of Item 11 of Part Two of the Fifth Schedule to the VAT Act).

A guideline document is expected to be issued by the MTCA. 

Should you have any questions or require any clarification, please do not hesitate to contact me or a member of the CCPS Malta tax team and we will be glad to assist