Legal Notice 86 of 2026 introduces a targeted amendment to Item 9 of Part Two of the Fifth Schedule to the VAT Act, effective from 1 October 2026. The change significantly narrows the scope of the VAT exemption applicable to gambling activities in Malta.

Under the revised provision, the exemption now applies only to “betting, lotteries and other forms of gambling, as may be approved by the Minister”, replacing the broader wording that previously extended to a wider range of gambling-related supplies.

To support implementation, the Malta Tax and Customs Administration (MTCA) issued binding Guidelines in April 2026. These provide clarity on how the exemption will apply in practice and confirm that, from 1 October 2026, the exemption (without the right to deduct input VAT) will be limited to three specific categories:

  • Low-risk games as defined in the Fifth Schedule to the Gaming Authorisations Regulations (S.L. 583.05)
  • Occasional junket events approved under the Gaming Authorisations Regulations
  • Facilities for betting on the outcome of real-life sporting events, where access is restricted to the physical location of the event (for example, on-site bookmakers or betting exchanges)

Any gaming activities falling outside these categories, including most forms of remote or online gaming, may no longer qualify for the exemption. Instead, they will be subject to the applicable place of supply rules.

From a VAT perspective, this creates a clearer distinction between:

  • Exempt supplies without credit – where VAT is not charged and input VAT cannot be recovered
  • Taxable supplies – where VAT is chargeable (or subject to reverse charge), with potential input VAT recovery

A joint MTCA and MGA press release confirms that these changes are intended to align Malta’s framework more closely with EU VAT principles, while addressing longstanding inefficiencies within the sector.

In practice, the impact will vary across operators. Some may benefit from improved input VAT recovery on costs linked to newly taxable activities, while others may face additional output VAT obligations and compliance considerations.

Given these developments, gaming operators should take this opportunity to reassess their VAT position, including:

  • Which activities remain exempt without credit
  • Which supplies will become taxable from 1 October 2026
  • The impact on pricing, margins, and commercial arrangement
  • Whether invoicing processes, VAT registrations, and systems remain fit for purpose

Until further clarification is issued, the MTCA Guidelines represent the primary reference point for determining the VAT treatment of gambling activities under the revised framework.

As these changes take effect, early assessment will be key. RSM Malta can support gaming operators in evaluating the impact across their business, ensuring compliance, and identifying opportunities arising from the revised VAT treatment. For further information or tailored advice, you may contact Kenneth Cremona at kenneth.cremona@rsm.com.mt or Michela Scicluna at michela.scicluna@rsm.com.mt.

Article written by Michela Scicluna - Manager, Indirect Tax and  Sven Muscat-Intern, Direct and Indirect Tax