Following the adoption of Directive (EU) 2020/284 (the CESOP Directive) introducing reporting requirements for payment service providers (PSPs), Malta has transposed this legislation into the Value Added Tax Act through Legal Notice 272 of 2023 which comes into force on 1 January 2024.
PSPs with Malta as either their home Member State or host Member State will be required to register with the Malta Tax and Customs Administration (MTCA) as an in-scope PSP for CESOP.
For those PSPs, who as at 1 January 2024 are already licensed in Malta where Malta is their Home MS, or in case where PSPs have passported their license to Malta and therefore Malta is a Host MS, the deadline for registration is the 25th of January 2024.*
For those PSPs who will obtain or passport their license in Malta following the 1st of January 2024, the deadline to register is 25 days following Malta becoming their home or host MS.
Malta has opened the portal for CESOP Registration for Maltese e-ID holders and has published the registration guidelines here.
A PSP is also required to inform the MTCA within 15 days from when Malta ceases to be their home or host Member State.
* currently extended to 16 February 2024
In-scope PSPs will be required to keep sufficiently detailed information on payees and payments and to submit certain quarterly detailed information to the Malta Commissioner for Tax and Customs (the Commissioner) concerning certain cross-border payments provided in Malta. A payment shall be considered a qualifying cross-border payment when the payer is located in a Member State and the payee is located in another Member State, in a third territory or in a third country. Furthermore, a PSP is only obliged to report qualifying cross-border payments when such a PSP provides payment services corresponding to more than 25 cross-border payments to the same payee.
Such information must be submitted in a standardised XML format and in accordance with Commission Implementing Regulation (EU) 2022/1504, by no later than the 28th day of the month following the calendar quarter to which the information relates. The information must be submitted over the web portal or through any other means as may be approved by the Commissioner.
In the event that a PSP has no information to report for a given quarter, such PSP is required to notify the Commissioner accordingly.
The penalties for failing to submit information or notifications in time will result in administrative penalties capped at €600 per report. However, following two electronic reminders sent by the Commissioner concerning the same submission, or where the information submitted by the PSP is found to be incorrect in such a way that it is misleading, deceitful or false, every senior managing official of such PSP may be found guilty of an offence and shall on conviction be liable to a fine of not less than €10,000 and not more than €30,000 for each offence.
The MTCA has also noted that it will be issuing guidelines for CESOP reporting.
With the first report deadline falling in April 2024 and the need to report cross-border transactions happening in multiple territories (for PSPs with a passported licence across the Member States), it is key that in scope PSPs have robust reporting tools that link to relevant data which is of good data.
How we can help
PwC provides an innovative reporting solution that covers multi-territory reporting as well as advisory services related to this new reporting requirement.
Our tax and legal experts can help you navigate the complexities of this new directive in several ways, from Impact Assessment to Data Assessment to the implementation of our new end-to-end integrated reporting solution.
For more information on this end-to-end reporting solution visit our dedicated page, or reach out to one of our experts in the contact list below.
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