Bookmakers and betting exchanges in Malta are in for an early Christmas treat after Europe’s premier gambling hub announced that these services will be exempted from Value Added Tax (VAT).
The Maltese government will no longer impose VAT on bets and wagers handled by local bookmakers, betting exchanges and “equivalent entities” starting January 1, 2018, The Times of Malta first reported.
Under the new Value Added Tax Act, published in the Government Gazette last week, bets on actual and virtual sports events, lotteries, competitions, lotteries, performance of an index, and even natural disasters and other phenomenon would also be exempted from the tax.
The Maltese government, however, clarified that the VAT exemption under the new tax regime did not include bets on the outcome of casino table games, including blackjack, roulette, poker, or any other casino-style game of chance. And any gambling services provided through the use of remote technology would still pay the VAT, the government added.
Government lotto and lotteries are currently exempted from the tax.
The Value Added Tax Act was enacted in order to keep up with the Council of Europe directive on the common system of VAT. According to the Council of Europe’s directive, a EU State may exempt betting, lotteries and other forms of gambling subject from VAT although such measures are still subject “to the conditions and limitations laid down by each Member State.”
The new taxation also comes at a time when Malta’s gambling industry is bracing for a number of regulatory changes.
It is not clear how the new policy will affect the government’s finances. Record shows that collected VAT makes up 7 percent of Malta’s annual gross domestic product. Last year, the government earned more than €700 million (US$825.06 million) worth of VAT.
Malta’s gaming industry accounted for over 12 percent of the nation’s economy in the first half of 2017.