Changes to Malta VAT exemption for gambling from 1 October 2026

The Legal Notice replaces the prior, broader exemption wording covering “government lotto and lotteries, agency services related thereto, and such other supplies related to gambling as may be approved by the Minister” with the new exemption wording reading: “Betting, lotteries and other forms of gambling, as may be approved by the Minister.”  

The change results in a more restricted application of the VAT exemption. As a result, a broader array of gambling services will no longer be exempt from VAT and will become subject to Maltese VAT when the amendment comes into force on 1 October 2026. 

For operators, this raises discussion points not only on whether they need to account for VAT on any of their supplies but also around input tax recoverability and whether the narrowing of the exemption may have the consequence of increasing input tax recovery. For example, an operator whose supplies were previously entirely exempt (and who therefore had no right to input VAT recovery) may find that some of those supplies are now taxable, potentially opening up partial or full recovery of input VAT on related costs.

This may also have an impact on the VAT compliance obligations and reporting requirements in Malta.

The Malta Tax and Customs Administration (MTCA) has supplemented the publication of the Legal Notice with guidelines clarifying which supplies the Minister has approved for the purposes of the exemption. Accordingly, the following supplies will remain exempt without credit:

• Low risk games as defined in the Fifth Schedule to the Gaming Authorisations Regulations (Subsidiary Legislation 583.05 or ‘SL583.05’); 
• Junket events required to be approved in accordance with the Gaming Authorisations Regulations (SL583.05) held on an occasional basis. Junket events shall be considered as being held on an occasional basis where they are not organised on a routine basis and which, due to their scale and nature, require specific planning and organisational arrangements.
• The provision of any facilities for gambling on the outcome of a real-life event, which facilities can only be physically accessed at the place where the event physically takes place, including the services of book makers, betting exchanges, and any equivalent facilities. The term ‘event’ shall mean a sporting event or competition.

The guidelines also confirm that live casino services qualify as an activity similar to an entertainment activity for place of supply purposes. This applies where casino-type games are conducted in real time by a physical dealer or presenter located in a studio or casino environment, and where the game is captured and transmitted to players via live audio-visual streaming, with players participating remotely through an electronic interface and the outcome being determined and communicated in real time.

Since live casino services are streamed and made virtually available rather than attended in person, the place of supply for B2C transactions is where the customer is established or resides — consistent with the general rule for streamed or virtual activities outlined above and therefore these should only be subject to Maltese VAT when the payer resides in Malta. This is a significant consideration for live casino operators based in Malta, as VAT may be due in the customer's jurisdiction rather than in Malta.

The MTCA guidelines have also clarified that specific online gambling and betting activities now fall within the definition of electronically supplied services for VAT purposes. The following are now explicitly included with ESS:

The classification of these services as ESS is significant because, for B2C supplies, ESS are taxed at the place where the customer is established, has a permanent address, or usually resides. This means that operators may have VAT obligations in the customer's jurisdiction rather than in Malta and should consider whether registration under the One-Stop Shop (OSS) scheme or equivalent mechanisms may be required.

• Review your current supplies against the new exempt categories.
• Determine whether VAT needs to be accounted for in respect of any supplies.
• Assess the expected change to your input VAT recovery position including partial attribution impacts and capital goods adjustments.
• Consider any adjustments needed to your VAT compliance and reporting ahead of 1 October 2026.
• Continue monitoring for any additional guidelines that may be issued.
• Assess the place of supply implications for your streamed, virtual, and live casino services, particularly for B2C transactions.
• Review existing contracts and pricing structures to determine whether VAT-inclusive pricing or contractual terms need to be updated.

To gain a deeper understanding of the recent changes and effectively plan for 1 October 2026, reach out to us. Our VAT and legal professionals are here to help.