Updates regarding VAT registrations and changes in thresholds are applicable as from 01/01/2025. The recent amendments affect VAT registration under Article 11, special schemes for small undertakings, and new VAT rules for services supplied across EU Member States.
Who Is Affected?
The updates apply to taxable persons seeking to register for VAT under Article 11 or those already registered. This includes self-employed individuals, freelancers, start-ups, incorporated companies, and anyone engaged in economic activity. Businesses must stay updated on the changes that impact VAT registration and its implications on cross-border business operations.
Key Changes
- New VAT Registration Threshold for Domestic Annual Turnover
- As of 01/01/2025, the domestic annual turnover threshold for persons seeking to register under Article 11 has increased to EUR 35,000.
- A new definition of ‘related party’ will also apply when determining domestic turnover.
- Small Enterprise VAT Scheme
- A Small Enterprise refers to any taxable person whose annual turnover within the EU does not exceed EUR 100,000.
- New Article 11A Registration: Where the place of supply is outside Malta (e.g., operating a stand in Italy and selling handmade jewellery), can apply for VAT exemption in Malta and charge Maltese VAT instead of registering in the foreign jurisdiction.
- New Article 11B Registration: Foreign taxable persons having their place of supply in Malta with turnover not exceeding EUR 35,000 in Malta may apply for this registration type.
- New Article 12 Registration Scenario
- Taxable persons supplying services to another EU Member State where the customer must account for VAT (reverse charge) must also register under Article 12 if they are considered to be Small Enterprises registered under Article 11 (B2B services to customers in other EU Member States).
- Taxable persons supplying services to another EU Member State where the customer must account for VAT (reverse charge) must also register under Article 12 if they are considered to be Small Enterprises registered under Article 11 (B2B services to customers in other EU Member States).
- Changes to Article 10 and Article 11
- A taxable person registered under Article 10 cannot switch to Article 11 within the first 12 months of registration (previously 24 months). However, the Commissioner may approve a change if the taxable person qualifies as a small undertaking and no input tax has been claimed since the registration date.
- A taxable person registered under Article 10 cannot switch to Article 11 within the first 12 months of registration (previously 24 months). However, the Commissioner may approve a change if the taxable person qualifies as a small undertaking and no input tax has been claimed since the registration date.
- Cash Accounting for Warranted Holders
- The cash accounting method now applies to warranted holders, offering an alternative method to the traditional VAT accounting system.
Our team is here to help you navigate the new VAT rules. We’ll ensure your business stays compliant and gets the most out of its VAT position. From registration support to handling cross-border transactions, we’ve got you covered. Feel free to reach out for guidance!