Malta’s New VAT Rules Change the Financial Equation for the Gaming Industry

16 October 2026, 11:49 Malta

Since 1 October 2026, gaming companies in Malta have been operating under new VAT rules. Fewer services are now exempt, but the changes also offer opportunities to reduce costs. Some operators will be able to recover VAT on expenses they previously had to absorb. The financial impact will therefore depend on each company’s business: the games it offers, where its customers are based and how it spends its money.

When presenting the reform, the Maltese authorities identified the sector’s competitiveness as one of its main objectives. According to the joint statement issued by the Malta Tax and Customs Administration (MTCA) and the Malta Gaming Authority (MGA), the changes followed industry consultations and took business feedback into account. Their publication in April gave companies six months before implementation to assess the financial implications and prepare their operations for the new requirements. That approach matters to operators. Predictable rules and the ability to plan costs also influence decisions about where and how to grow a business.

Costs are, in fact, one of the most significant aspects of the reform. Where an activity is VAT-exempt without the right to deduct input tax, VAT paid on related purchases remains a cost to the company. Once that activity becomes taxable, the eligible portion of that VAT may be recovered. MTCA guidance also provides for this possibility in relation to certain supplies whose place of supply is outside Malta. This could improve the financial position of operators that have previously borne substantial irrecoverable VAT. The benefit is not automatic, however. Where a purchase supports activities with different VAT treatments, the recoverable portion must be determined. Nor do the new rules allow blanket retrospective recovery of VAT on costs used entirely for activities that carried no right to deduct input tax.

The change was introduced through Legal Notice 86/2026, published in April and effective from 1 October. The exemption remains available for a limited range of services: certain low-risk games, approved occasional junket events, and betting facilities that can only be accessed physically at the venue of the relevant sporting event. Junket events must also meet an additional condition: they must not be organised routinely and must require specific planning because of their scale and nature. For services taxable in Malta, the standard VAT rate is 18%, unless an exemption or reduced rate applies. The 18% rate itself is not new. What the reform changes is which gaming services can remain exempt from VAT. 

For international operators, however, the calculation does not end with the Maltese rate. For electronically supplied services to consumers, the relevant location is where the customer is established, has a permanent address or usually resides. A company serving players in several countries must assess its obligations market by market. Holding a Maltese licence does not, in itself, mean that all its services are subject to Maltese VAT. There are also distinctions between games offered on the same platform. Automated acceptance and processing of bets, along with certain automated casino games, fall within the category of electronically supplied services. Online gaming delivered through the streaming of a live casino event is expressly excluded from that category in the MTCA guidance. This does not make it VAT-exempt; it requires a separate assessment of the applicable place-of-supply rules. In practice, operators need to consider both where their customers are based and the individual products they offer.

The Maltese authorities expect clearer rules and the ability to recover eligible input VAT to support the sector’s competitiveness. Some companies may gain a tangible benefit from VAT recovery; for others, the additional tax burden may outweigh the savings. The overall impact on the industry has yet to be assessed. The way the reform was prepared nevertheless reveals a particular approach to the relationship between government and business. The industry is involved in the discussion, given time to prepare, and its ability to remain competitive is included among the authorities’ stated objectives. This does not remove the new obligations, but it gives companies a clearer basis for planning.

For a regulated sector, that predictability has a value of its own. Particularly when investment decisions are made years ahead, while operating conditions also depend on the next legislative change.