MTCA guideline on monthly VAT periods

Subsidiary Legislation 406.02 enables a taxable person whose input tax is expected to exceed its output tax for 4 consecutive VAT periods to apply to the CfTC for the allocation of monthly instead of quarterly VAT periods. The MTCA has published a guideline which sets out the eligibility criteria for the shift from quarterly to monthly VAT periods.

In summary, these eligibility criteria are:

• the credit for input tax must have exceeded the output tax in respect of each of the preceding four consecutive tax periods;
• the excess of such credit for input tax over the output tax collectively exceeds €50,000;
• at least 90% of the aggregate taxable value of the supplies made by the applicant consist of supplies that are exempt with credit (Part One of the Fifth Schedule to the VAT Act) and/or supplies whose place of supply is outside Malta (Third Schedule to the VAT Act), which supplies confer a right to deduct input tax;
• the applicant is compliant with all tax obligations.

View the guideline here