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      From 1 October 2026, Malta will significantly curtail the VAT exemption for gambling offerings indeed only a narrow set of activities - low‑risk games, approved occasional junket events, and on‑site betting linked to live sporting events - will remain exempt. This means that operators and other players across the gaming ecosystem need to reassess the VAT treatment of their offerings, input VAT recovery, systems and reporting requirements.

      Background

      Since 2018, Maltese VAT rules exempted from VAT, without credit, the following transactions1:

      1. the provision of any facilities for the placing of bets and wagers, including the services of book makers, betting exchanges and equivalent facilities
      2. the granting of the right to participate in a lotto or lottery
      3. the granting of the right to participate in a bingo game
      4. the provision to players of devices and equipment for the playing of casino-type games of chance, the outcome of which would be determined by a random generator, including tables for the playing of roulette, blackjack, baccarat, poker when played against the house, and slot machines
      5. supplies which are strictly required, related and essential to, and which form part of an underlying gambling or betting transaction falling under the items (1) to (4) above, as shall from time to time be determined by the Malta Gaming Authority

      Changes effective 1 October 2026

      With effect from 1 October 2026, the VAT exemption for gambling activities will be significantly narrowed and will apply only to the following operations:

      1. low risk games2 as defined in the Fifth Schedule to the Gaming Authorisations Regulations
      2. junket events required to be approved in accordance with the Gaming Authorisations Regulations held on occasional basis i.e. non-routine events which, due to their scale and nature, require specific planning and organisational arrangements
      3. the provision of any facilities for gambling on the outcome of real-life events, 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’ means a sporting event or competition

      Key considerations for gambling operators

      • VAT treatment of income derived from gambling offerings

        Operators should assess which of their offerings fall within scope of Maltese VAT rules and for transactions falling within scope of Maltese VAT rules, operators should determine which offerings will remain VAT-exempt (if any), which offerings will attract 18% Maltese VAT and on what taxable value the 18% VAT will be calculated.

      • VAT recovery position

        Businesses that previously engaged in exempt without credit supplies would have suffered partial or full restrictions on input VAT recovery. To the extent that their supplies become taxable, operators should reassess their entitlement to input VAT deductibility, including whether full recovery may now be available.

      • Capital goods scheme implications

        Operators should consider the impact of the change in VAT treatment on their entitlement to recover input VAT falling within scope of the Capital Goods Scheme.

      • Systems and operational readiness

        Accounting systems, invoicing processes and VAT codes should be reviewed and updated to ensure VAT is correctly charged, recorded and reported from the effective date.

      • VAT registrations and reporting obligations

        Operators should assess whether the change in VAT treatment impacts their VAT registration status, their filing obligations and their reporting under Maltese VAT rules.

      Wider commercial impact

      These changes will also have a broader impact across the gambling ecosystem. As a result, parties within the gambling ecosystem may wish to review pricing models and, where relevant, clarify whether prices are VAT‑inclusive or exclusive. 

      Particular care should also be taken in respect of transitional supplies, including ongoing supplies and advance payments spanning the effective date, to ensure the correct VAT treatment is applied.

      How can we assist?

      KPMG in Malta supports gambling operators and ecosystem participants in navigating VAT change with clarity and confidence. We can assess the impact of the new rules on groups in general and on specific gambling offerings, identifying exposures and opportunities for input VAT recovery and supporting Capital Goods Scheme reviews. We also assist with VAT coding readiness, VAT registration changes (if necessary) and compliance requirements - helping you remain compliant in a rapidly evolving VAT landscape.

      Our Services

      Ensuring compliance, optimising cash flow and minimising risk; managing indirect tax is an ongoing challenge for today’s tax leaders. With deep experience across VAT, GST and trade regulations in multiple jurisdictions, KPMG professionals can provide the following services to help you navigate complexity with confidence.
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      Contact us

      Anthony Pace
      Anthony Pace

      Partner, Head of Tax

      KPMG in Malta

      Louise Grima
      Louise Grima

      Director, Tax Services

      KPMG in Malta

      Russell Mifsud
      Russell Mifsud

      Director, Head of Gaming Europe

      KPMG in Malta

      1 Other than for those exempt without credit supplies actually taxed outside Malta

      2 Namely: (1) non-profit games wherein the value of the stake does not exceed € 5 per player; (2) commercial communication games (with certain limitations); (3) Limited commercial communication games, wherein the value of the stake does not exceed € 2 per player, and the value of the prize does not exceed € 250 (with certain limitations)