Online Gambling VAT in Malta: Is It still VAT Exempt? 

The Maltese VAT legislation contains an exemption from VAT in relation to lotto, lotteries and gambling activities as approved by the Minister. In November 2017 a guideline containing a list of gaming activities which fall under the VAT exemption had been published. This this guideline has just been replaced by another guideline published on 6^th April 2026 which narrowed down the list of gaming activities in relation to which the VAT exemption shall apply.

The change to the applicability of the VAT exemption in relation to gambling activities shall become effective on 1 October 2026. At the same time, changes to the place of supply rules for electronically supplied services shall also become effective which also have an impact on certain gambling supplies.

The Online Gambling VAT Exemption: What changed?

With effect from 1^st January 2018, the exempt without credit VAT exemption was applicable to:

1. The provision of any facilities for the placing of bets and wagers, including the services of book makers, betting exchanges and any equivalent facilities;
2. The granting of the right to participate in lotto or lottery;
3. The granting of the right to participate in a bingo game;
4. The provision to players of devices or equipment for the playing of casino-type games of chance the outcome of which is determined by a random generator;
5. Supplies which are strictly required, related and essential to, and which form part of an underlying gambling or betting transaction listed above.

This meant that any business deemed to be providing any of the above listed gambling activities in Malta was exempt from charging VAT to his customers on the provision of such service and was not entitled to claim any input VAT incurred in relation to these activities.

Following the publication of  the new VAT guideline on 6^th April 2026, the list of gambling activities deemed to fall within the remit of the VAT exemption has been narrowed down to the following:

• Low risk games as defined under Maltese gaming regulations  
• Certain approved junket events  
• Betting facilities linked to real life events that are physically accessed  

These changes to the interpretation of the applicability of the VAT exemption shall come into force as from 1 October 2026. As from that date, gambling activities taking place in Malta which were previously VAT exempt and which now do not fall within any of the above, will now become subject to VAT meaning that the supplier must charge VAT on its supplies when these take place in Malta and shall become entitled to recover input VAT incurred in relation to the gambling activity.

Where are supplies deemed to be taking place and how does this interact with electronically supplied services?

As the scope of the gambling exemption narrows, the ESS classification becomes increasingly relevant.. In relation to gaming activities, one should in particular assess whether the supply is deemed to be an electronically supplied service as specific rules apply for these services.

What Are Electronically Supplied Services (ESS)? 

Electronically supplied services are considered as a distinct category of services under VAT law. Such services are defined at EU level and adopted into Maltese legislation. 

In terms of the  EU VAT Directive on electronically supplied services and further clarified by the Council Implementing Regulation 282/2011, electronically supplied services are services which are delivered over the Internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology.

For a business operating in this industry, understanding the place of supply of their services is crucial as this may impact their compliance obligations in other member states. In order to facilitate the classification of a service as to whether it is considered to be treated as an ESS or otherwise, the Malta Tax and Customs Administration has updated a guideline on 7^th April 2026, outlining a list of services which shall be considered as ESS and another list of services which shall not be considered as being ESS.

In relation to the gaming industry, the guideline states that the following activities shall be deemed to be ESS:

1. the offering of a facility for the placing of bets on the internet or via an electronic network in connection with any event, whether the event is live or otherwise, where the placing and processing of such bets is essentially automated;
2. online access to gambling platforms which enable players to play ‘random number generator’ games, whether against the ‘house’ (such as casino-type games) or against other players (e.g. poker) where the players are geographically remote from one another, and where the entire process is automated and the service provider’s staff cannot impact on the transaction nor intervene in the process;
3. online access to bingo games with numbers generated by the system or to streamed conventional bingo games where players make their selection during the game by using the electronic system and winners are identified automatically.

Furthermore, relevant to the gaming industry, the guideline specifically excluded ‘’ The offering of a facility for internet gambling pursuant to the streaming of a live casino event’’ from being considered as ESS.

How We Can Help 

The changes brought about by the guidelines recently issued and discussed above, may effect a business operating within the gaming industry both from the VAT exemption point of view and from the clarification in relation to the place of supply of services provided to non-taxable persons. Understanding these changes can significantly impact your business VAT position with respect to the chargeability of VAT on your services, your right to recover input VAT and any obligations you may have in other jurisdictions. 

At A2CO, we work with iGaming operators to: 

• Analyse service classification and VAT treatment  
• Structure operations in line with VAT and regulatory frameworks  
• Align tax position with broader iGaming regulatory requirements in Malta  
• Support businesses navigating the Malta gaming licence process  
• Integrate VAT considerations into wider corporate tax considerations in Malta  
• Provide guidance where digital services intersect with evolving frameworks such as MiCA regulation and digital asset compliance  

If you are unsure how these changes will effect your business, it is worth reviewing your structure carefully. 

A short discussion can often clarify whether your business’s VAT position.