Increase of Threshold for Small Traders

As announced in the Budget for 2018 and by means of LN 163 of 2018,  the turnover threshold under which service providers remain eligible for registration under article 11 has been increased from €14,000 to €20,000 in a period of 12 calendar months.   These regulations, effective on 1st July 2018, implement the provisions of Council Implementing Decision (EU) 2018/279 of the 20th February 2018 allowing Malta, until the 31st December 2020, to exempt from VAT taxable persons whose economic activity consists principally in the supplies of services with a high value added (low inputs) and whose annual turnover is not higher than €20,000. 

This increase in the threshold would be of interest to small traders who are registered for vat purposes under article 11 of the VAT Act and who would like to remain so registered in spite of an increase in their turnover, provided that their annual turnover does not exceed €20,000.  It may also be of interest to persons who, while registered under article 10, may wish to become registered under article 11 as exempt persons.  In that case, they may opt to change their registration provided that their turnover for a relevant period of 12 calendar months would not have exceeded the Exit Threshold.  With effect from 1st July 2018 this has been increased from €12,000 to €17,000.   

For more information you may read the explanatory note by the VAT Department which one can find on https://cfr.gov.mt/en/vat/legislation-and-LNs/Documents/Explanatory%20Note%20-%20Small%20Traders%20Threshold_EN.pdf.  You may also contact the firm’s tax and corporate services partner Stephen Balzan on sbalzan@act.com.mt

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on info@act.com.mt.

 

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