The Maltese VAT Act is based on the VAT Directives of the European Union. VAT is levied on the supply of goods and services in Malta. Every taxable person, i.e. a person engaged in an economic activity, is obliged to register for VAT and charge VAT where applicable.
The standard VAT rate is 18%. A reduced rate of 5% applies to certain supplies such as confectionary items, medical accessories and items for the exclusive use of the disabled. As from 1st January 2011, a 7% rate is applicable to the supply of specific types of accommodation. Other supplies such as international transport of goods and services, gold, food for human consumption and pharmaceuticals are zero rated.