Malta Narrows Gambling VAT Exemption
Most remote gambling activity offered by Malta-licensed operators will become subject to VAT for the first time from October 1, 2026, after the Malta Tax and Customs Administration (MTCA) confirmed which forms of sports betting and gambling still qualify for the country's VAT exemption.
The change follows Legal Notice 86 of 2026, published in the Government Gazette of Malta on April 1, 2026, and Guidelines the MTCA issued on April 6, 2026 setting out, for the first time in precise terms, what the Minister has actually approved as exempt.
What The Legal Notice Changed
Legal Notice 86 of 2026 amended Item 9 of Part Two of the Fifth Schedule to Malta's Value Added Tax Act (Chapter 406).
The exemption for gambling now reads "betting, lotteries and other forms of gambling, as may be approved by the Minister," language brought into line with Article 135(1)(i) of the EU VAT Directive, which lets each member state set its own conditions for a gambling VAT exemption.
On its own, the amended wording said little. The substance came five days later, when the MTCA published Guidelines under Article 75(2) of the VAT Act naming exactly which activities the Minister has approved.
What Stays Exempt
The Guidelines list only three categories of gambling supply that keep VAT-exempt status without credit from October 1: low-risk games as defined in the Fifth Schedule to the Gaming Authorisations Regulations (Subsidiary Legislation 583.05).
Junket events approved under the same regulations and held on a genuinely occasional, non-routine basis; and facilities for betting on a real-life sporting event that can only be accessed physically at the venue where the event takes place, including on-course bookmakers and betting exchanges.
What Becomes Taxable
Everything outside that list falls outside the exemption. The MTCA's own guidance names online casino, live casino, RNG games, online sports betting, betting on events placed remotely, online poker and digital lotteries as forms of gambling that do not feature among the approved exempt activities.
In practice, that covers the bulk of what Malta-licensed remote operators sell. Online RNG casino games and player-versus-player products such as poker rake were already taxable under the regime Malta has run since 2018; the real shift is that online sportsbook betting and online live casino, both previously treated as exempt in practice, move into taxable territory alongside them.
Casino Games Hub
A Partial Trade-Off On Input VAT
The change cuts both ways. Supplies that move from exempt to taxable can no longer rely on the old exempt-without-credit treatment, so operators face new output VAT exposure on those revenue lines.
But taxable status also opens the door to recovering input VAT on costs tied to that same activity, including technology infrastructure, professional fees and marketing spend that was previously irrecoverable.
Advisers including WH Partners and BDO Malta describe the net effect as commercially material rather than a compliance footnote, since the impact compounds across a financial year. The classification of a supply as an electronically supplied service also becomes more consequential under the new framework, because it determines whether VAT is due in Malta or in the customer's own location.
Malta remains one of the largest licensing hubs for online gambling operators serving multiple markets, so the reclassification has reach well beyond Malta's own borders.
Advisory firms working with MGA-licensed operators are recommending a supply-by-supply review now: mapping each product against the three approved exempt categories, reassessing electronically-supplied-services status product by product, and stress-testing margin models for the new VAT treatment before the Guidelines take effect on October 1, 2026.
