E-Commerce & B2C Services in Malta
B2C services related to telecommunications, broadcasting, and electronic supplies (“TBE services”) are considered to be provided where the non-taxable customers are established, where their permanent address is located, or where they typically live. This applies regardless of whether the supplier or the customer is situated within or outside the EU.
Services provided electronically are delivered via the internet or an electronic network. They are inherently automated, requiring minimal human intervention, and are impossible to ensure without the use of information technology.
Read more about B2C services & E-Commerce in Malta in our comprehensive guide.
B2C Services in Malta
Examples of TBE services provided electronically include:
- Development of websites.
- Services for web hosting.
- Remote upkeep of software and hardware.
- Updates for software.
Foreign providers who are not based in Malta and provide business-to-consumer (“B2C”) services with a Maltese point of sale must register for Maltese VAT.
Foreign suppliers of B2C services may simplify their registration and reporting obligations for all EU Member States on or after July 1, 2021, by registering in a single Member State for the EU-wide “One Stop Shop” (OSS) program.
GVC can help you with your OSS/IOSS requirements visit our dedicated page by clicking here for more information about our services.
Selling in Malta?
E-Commerce in Malta
Inbound consumer products and telecommunications, broadcasting, and electronically delivered services (“TBE services”) are subject to the special place of supply requirements. The objective of this regime is to tax these supplies according to the destination principle, i.e., at the point of consumption.
Furthermore, since July 1, 2021, a new EU-wide “One Stop Shop” (OSS) system applies which simplifies registration and reporting requirements of international e-commerce products and services providers.
These provisions replicate Chapter 6 of Title XII of the EU VAT Directive (the “VAT e-commerce regulations”), as revised by Council Directives (EU) 2017/2455 and (EU) 2019/1995.
The OSS replaces the Mini One Stop Shop scheme, implemented throughout the EU in 2015 and included:
- Cross-border telecommunications services.
- Radio broadcasting services.
- Electronically provided services (“TBE services”).
The OSS was supposed to go into effect on January 1, 2021, however, it was delayed due to the Coronavirus pandemic. The OSS is a voluntary simplification tool that enables eligible taxable persons that make cross-border B2C supplies, both inside and outside the EU, to avoid registering in each Member State of consumption.
It generally applies to:
- B2C services provided by taxable persons based outside the EU (the “non-Union One Stop Shop”).
- B2C distance sales of goods and services provided by taxable persons based within the EU but not in the Member State of consumption (the “Union One Stop Shop”).
- Distance sales of goods from outside the EU with a value of less than EUR 150 (the “Import One Stop Shop,” or IOSS).
An EU business must register and utilize the OSS Scheme in the Member State where it has its headquarters (generally, its principal place of business or head office). A non-EU business with one or more established premises in the EU may register in any Member State with a fixed establishment.
A non-EU business that does not have such permanent premises may register in the Member State of its choosing. Suppose a non-EU business decides on an intermediary in the EU to conduct distance sales from outside their EU Member State on their behalf. In that case, the non-EU firm must register in the Member State where the intermediary is based.
A business may register under the scheme for distance sales of goods imported from outside the EU if one of the following conditions are met:
- The person is established in an EU Member State.
- The person is represented by a mediator established in an EU Member State.
- The person is established in a country outside the EU. The EU has agreed on a mutual assistance agreement similar in scope to the intra-EU mutual assistance agreement and conducts distance sales from that country.
A taxable person who has registered for an OSS must send quarterly electronic VAT returns to the Member State of identification. Returns are needed monthly if the company is enrolled for the IOSS. Returns are due by the end of the month after the tax period covered by the return in each instance. Together with the VAT paid, these returns are subsequently transferred through a secure communications network by the Member State of identification to the Member States of consumption.
Persons registered for the OSS in Malta are expected to keep thorough records of their transactions and electronically submit a specific VAT report to the Maltese Tax Department.
OSS records must be kept for ten years after the end of each fiscal year. Upon request, the transaction is completed and made electronically accessible to the appropriate authorities.
GVC can help you with your OSS/IOSS requirements. Contact our VAT experts for more information about our services.
Last Updated:28/12/2023
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
