Sports bets to be free from VAT in 2018 in Malta

  • VAT exemption will apply to gambling on sports and lotteries but not casino games
  • Removal of VAT is in accord with a Council of Europe directive

The sports betting industry in Malta has been given a New Year bonus with the news that gambling on sporting events will no longer attract a Value Added Tax (VAT) charge from January 2018.

VAT is set to be axed from sports bets in Malta.
VAT is set to be axed from sports bets in Malta.

Bookmaker and betting exchange services will also be free of VAT from next month, under a regulatory reform announced in the Government Gazette last week.

The official notice states that the placing of bets and the services of betting operators, including what are described as ‘equivalent facilities’, will be exempted without credit. The lifting of VAT will extend to all betting on the outcome of real or virtual events, a category that includes sports events, competitions, performances of financial indexes and betting on natural events.

Government and other lottery games are already exempt from VAT.

While the lifting of VAT is good news for sports bettors and lottery players, the casino industry won’t be getting a similar bonus.

Gambling on the results of casino games, including games like blackjack, roulette and poker will not be VAT-exempt, nor will slots play or gambling that relies on remote gaming equipment.

Lost revenue

The general terms of the VAT exemption are laid out in the Value Added Tax Act, which is an implementation of a Council of Europe directive related to VAT. The directive permits member states to exempt gambling activities from VAT, subject to certain conditions.

In 2016, the government of Malta took a little over €0.7 ($0.83) billion in VAT revenue, which amounted to 7.3 percent of the island’s GDP. According to reporting by the Times of Malta, the cost to the government in terms of lost revenue as a result of this measure had not been established and officials did not give any further details on how the VAT change would be implemented when it comes into effect on January 1st.

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