VAT Gaming changes for 2018
While Malta has seen the breakthrough in the international pension sector due to its attractiveness for QROPS and QNUPS, it is now aiming to come to similar agreements with other countries and the island sees an opportunity to cater for the pension needs of companies and individuals from EU markets. There is however no specific guidance applicable with respect to e-gambling activities and it is recommended that the exact VAT treatment is analysed on a case by case basis. KPMG Insights The changes will mainly effect providers of online casino games such as blackjack, baccarat, roulette and poker, which to date have exempted their supplies and which, as from 1st January will have output supplies bearing a VAT-taxable status. Such operators will typically require a standard VAT registration referred to as an Article 10 VAT registration , necessitating a need to switch over from any existing simplified type of VAT registration i. If any required field is left blank, it will not be possible to process your request. B2C and B2B , thereby allowing suppliers of B2C gambling services to consolidate their activities under one licence, such consolidation may make it more difficult to comply with the VAT obligations. However, a full imputation system applies to the taxation of dividends, whereby the tax paid by the company is imputed as a credit to the shareholder receiving the dividend.
Whereas the proposal is to replace the multi-licence system i. Classes 1 to 4 with just two forms of licences i. B2C and B2B , thereby allowing suppliers of B2C gambling services to consolidate their activities under one licence, such consolidation may make it more difficult to comply with the VAT obligations. This would notably be the case when the operator would be engaged in a mix of supplies that are VAT-taxable and exempt in nature. The Guidelines in respect of the determination of the taxable value of gambling and betting services, clarify the manner in which the taxable value should be calculated in a sector where the remuneration is not the traditional VAT consideration.
In addition the Guidelines, which follow EU jurisprudence, contribute to having consistency across the industry and seek to minimise the implications of the change-over on gambling operators.
Item 9 of Part 2 of the 5th Schedule to the VAT Act exempts without credit 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. The first set of Guidelines clarify the scope of the said exemption by providing that with effect from 1st January , the Gambling VAT exemption in Malta will be limited to the provision of the following supplies:.
The provision of facilities for the placing of bets and wagers, including the services of book makers, betting exchanges and any equivalent facilities. The granting of the right to participate in a lotto or lottery, including Grand Lottery, Super 5, scratch cards, keno and any other lottery-type games;. The provision to players of devices or equipment for the playing of casino-type games of chance, the outcome of which is determined by a random generator, including tables for playing of roulette, blackjack, baccarat, poker when played against the house, and slot machines.
Supplies which are strictly required, related and essential to, and which from part of an underlying gambling or betting transaction falling within paragraphs i to iv above, as shall from time to time be determined by the MGA.
The second set of Guidelines deal with the calculation of the taxable value of gambling and betting services. Specifically the Guidelines establish that:.
In all other cases, the consideration received by the operator shall be equal to the revenue of the supplier i. International and regional players have established operations in the country, offering a full set of banking services that range from retail and investment banking to trade finance and custody services, and prospects for future growth are high. The information included in this publication is for information purposes only and is subject to change.
In fact, fund service providers recently voted the island as their favoured European fund domicile. As more offshore funds choose to move into regulated onshore jurisdictions, Malta is poised to win a significant share of the business seeking an EU location. Malta has made significant strides to the international insurance market in attracting world-class companies to its shores. EU passporting rights and competitive operating costs are key attractions of locating in Malta.
The country also championed the introduction of innovative structures such as Protected and Incorporated Cell Companies. Both structures allow firms to write risks through cells within a core company and provide businesses with a cost-effective alternative to setting up a stand-alone insurance company. The cell model is also applicable to insurance managers and brokers.
Some 60 insurance companies are today registered in Malta, with the large majority being international players and only a handful of companies being active in the local market. International insurance business now accounts for more than 80 per cent of the total gross written premiums. With new legislation on reinsurance special purpose vehicles, Malta is positioning itself to tap new markets. The island has recognised the growing importance of insurance linked securities and catastrophe bonds, as well as the convergence of reinsurance and capital markets.
Offering a new breed of retirement products, Malta has become a key centre for pension transfers. The island provides the ideal solution for high-net-worth individuals looking for an investment vehicle, international workers planning for retirement and global corporations seeking pension schemes for their staff. While Malta has seen the breakthrough in the international pension sector due to its attractiveness for QROPS and QNUPS, it is now aiming to come to similar agreements with other countries and the island sees an opportunity to cater for the pension needs of companies and individuals from EU markets.
The Malta trust, combining all the features of the Anglo-Saxon trust concept within a civil law framework, has quickly become the preferred vehicle for professionals and high-net-worth individuals seeking an effective and trustworthy solution to wealth management issues. Trusts have been set up in Malta to safeguard everything from heirlooms to stocks, bonds, art and real estate. This scheme is intended to simplify the EU VAT compliance obligations for operators who would otherwise be required to have multiple VAT registrations.
The changes could have a significant impact on EU and non-EU iGaming operators, on a number of levels. The Commission issued guidance on the MOSS, which provides information on the VAT compliance aspect of the changes, including the registration process, the submission of VAT returns and the making of payments.
A copy of the guide can be accessed through: The above information is being provided as a general guide only and should not be considered as a substitute for professional advice. Disclaimer The information on this web site is being provided as a general guide only and should not be considered as a substitute for professional advice. Click on publications to proceed Proceed. The rules today Currently, B2C supplies of telecommunications, broadcasting and e-services within the EU are treated as taking place in the country of the supplier.
Telecommunications, including fixed or mobile telephone services 2. Broadcasting, meaning radio or television programmes provided over a TV network or the internet 3. This latter category includes: Determining the location of the customer?