Malta requests extension of increased ‘small undertaking’ VAT threshold till 2024
On 5 June 2020, Malta requested an authorisation from the Commission to continue to derogate from Article 287 of the VAT Directive and to apply this increased threshold until 31 December 2024.
In terms of Article 287 of the EC VAT Directive (Directive 2006/112/EC), Malta is permitted to exempt from VAT three categories of taxable persons, specifically taxable persons whose annual turnover is no higher than:
- EUR 37 000 if the economic activity consists principally in the supply of goods;
- EUR 24 300 if the economic activity consists principally in the supply of services with a low value added (high inputs); and
- EUR 14 600 in other cases, namely supplies of services with a high value added (low inputs).
The above provision was transposed into the Malta VAT Act in the Sixth Schedule, Part 1, item 8.
In 2018, Malta received authorisation to increase the threshold for the lowest of the three categories until 30 December 2020 (Implementing Decision (EU) 2018/279 ), and in fact, currently, the threshold for the third category is €20,000. On 5 June 2020, Malta requested an authorisation from the Commission to continue to derogate from Article 287 of the VAT Directive and to apply this increased threshold until 31 December 2024.
In terms of the Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2018/279 authorising Malta to apply a special measure derogating from Article 287 of Directive 2006/112/EC on the common system of value added tax published on 30 September 2020 the Commission held that it is appropriate to authorise Malta to apply the derogating measure until 31 December 2024.
source: eur-lex.europa.eu