Taxes like VAT, customs duties and eco-contributions are part and parcel of every day transactions including sales, purchases and imports/exports. While they can represent a major cost and compliance burden, such taxes can often also offer a cash flow management challenge.

The magnitude of tax collections and refunds is often rarely highlighted in financial statements.  It is often the case that minor indirect tax errors can translate to significant consequences through the repetition of transactions. Inefficient business structures or processes can prove costly.

Since Malta’s accession to the EU in 2004, government policy and EU decisions have had a dramatic effect on the VAT and customs systems in Malta. Changes to EU Directives affect our national legislation whereas EU Regulations have direct effect on the taxpayer. Rates and indirect tax liabilities in various EU countries change frequently and the number of indirect tax compliance visits and investigations carried out by the VAT administration is increasing. With the rise in international trade, addressing cross-jurisdictional issues and complying with the indirect tax obligations in Malta and elsewhere can be a truly complex and daunting task.

KPMG in Malta understands the challenge of staying on top of indirect taxes. We know how important it is to devise systems that process each transaction using the right indirect tax treatment and capturing the data required by the tax authorities.  It is rather unsettling to have to deal with tax authorities when the process goes wrong. That is why we provide a range of indirect tax services ranging from preventative services such as health checks to identify potential problem areas to indirect tax planning. Our indirect tax services include:

Domestic and international VAT advisory

Whether you are looking to reduce costs or use VAT to achieve competitive advantage, we provide you with the tax technical insights and skills you need to realise your most important business ambitions. We can help in establishing your company's VAT status, development and execution of effective indirect tax management strategies including internal controls, advising on the indirect tax consequences of entering new markets and undertaking corporate transactions such as global restructuring, mergers, acquisitions and capital reconstructions, provide relevant advice on the VAT treatment of particular transactions, conducting diagnostic and analytical reviews of your VAT practices, maximising VAT recovery, VAT cashflow management and compliance processes review.

VAT compliance

Whereas less than excellent VAT house-keeping can result in penalties, damaged reputation and missed opportunities, it is a challenge to retain consistently excellent standards of compliance with the requirements of the ever-evolving VAT law. In order to help taxpayers in meeting this challenge, KPMG provides services such as assistance with VAT registration, preparation and submission of VAT returns, recapitulative statements, Intrastat and other VAT forms, refund applications, computation of partial attribution, reporting and assistance with adjusting VAT returns.  We also assist taxpayers in filing objections and appeals, liaise with the VAT Department on such matters and support taxpayers in the course of tax audits or other investigations by tax authorities.

Duty on documents and transfers

Malta adopts a system of imposing duty on particular documents including certain policies of insurance and transfers of particular assets such as immovable property and securities whether on death or otherwise. We provide advice on structuring transfers of property in the most cost-effective manner and on your eligibility to duty exemptions.  We also offer guidance on all aspects of duty including preparation of valuations of property for duty purposes and documentation required by the Inland Revenue Department to affect such transfers in a duty-compliant manner.

Customs, excise and international trade

International trade is a risk laden environment. With particular relevance to the retail and manufacturing industries, the trend is to focus closely on the international supply chain with a view to minimising cost. Customs and excise duties and related expenses tend to have direct impact on the bottom line for organisations. Regulation in this field is highly specialised and interacts heavily with cross-border jurisdictions’ legislations. We provide our clients advice on the opportunities created in duty planning, consulting on international trade, conducting reviews of duty systems in place, assisting in the reclamation of duties overpaid and in meeting the reporting obligations.