As part of our previous short read we provided an overview of the main VAT changes effective from 1 January 2025. In this article, we provide a more detailed analysis of the changes to the SME scheme in line with the updates to the EU Council Directive 2006/112/EC.
As of 1 January 2025, a new special scheme for small enterprises will be applicable.
Taxable persons established in an EU Member State, different from the one where the VAT on their supplies is due, can exempt their cross-border supplies from VAT. This exemption is similar to the one available to small businesses established in that Member State for domestic transactions. The amendments to the Value Added Tax Act (VATA) are split in two:
A new Article 11A has been introduced for taxable persons established in Malta who qualify as small undertakings under the Sixth Schedule to the Value Added Tax Act (VATA) and would like to participate in the new scheme for small undertakings. This registration will only become effective from the date notified by the Commissioner to the taxable person.
The registration number assigned under article 11A will be the same as the registration number allocated to the person under article 10 or 11, with the suffix "EX" added to it.
Taxable persons applying for registration under Article 11A qualify as a small enterprise if:
An Article 11A registration application must be submitted electronically via the designated portal and must include:
A person registered under article 11A must inform the Commissioner electronically of any changes to previously provided information, including:
The exemption is applicable once the Commissioner notifies approval.
Persons registered under article 11A must report their turnover every calendar quarter. Such a declaration includes the value of supplies made in Malta and in every other Member State.
Persons registered under article 11A must apply to the Commissioner for an update or cancellation of their registration within 15 working days after they become ineligible for the small enterprises scheme. Similarly, they must apply for cancellation within 15 working days of exceeding their Union annual turnover. The exemption under article 11A ceases to apply on the first day of the next calendar quarter or, if notified in the last month of a quarter, the second month of the next quarter.
If you and your business require further information, our team can assist you in this regard. At PwC, we are a team of professionals ready to provide the support you need.
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