The issuance of the Malta Tax and Customs Administration (MTCA) guidelines on 6 April 2026 marks a pivotal development in the VAT treatment of gambling activities, building on the framework introduced by Legal Notice 86 of 2026.
While the legislation redefined the exemption in broad terms, the guidelines now provide the practical boundaries - and, importantly, reshape the VAT position of gaming operators.
A shift from a broad exemption to a defined scope
The MTCA adopts a restrictive interpretation of the exemption (without credit), limiting it to a defined set of Minister-approved activities, namely:
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low-risk games:
“Low risk games as defined in the Fifth Schedule to the Gaming Authorisations Regulations (Subsidiary Legislation 583.05 or ‘SL583.05’)”;
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occasional junket events:
“Junket events required to be approved in accordance with the Gaming Authorisations Regulations (SL583.05) held on an occasional basis. Junket events shall be considered as being held on an occasional basis where they are not organised on a routine basis and which, due to their scale and nature, require specific planning and organisational arrangements; and
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betting carried out physically at the location of real-life events:
“The provision of any facilities for gambling on the outcome of a real-life event, which facilities can only be physically accessed at the place where the event physically takes place, including the services of book makers, betting exchanges, and any equivalent facilities. The term ‘event’ shall mean a sporting event or competition.”
This signals a clear policy direction: the exemption is no longer the default position for gambling services.
What falls outside the exemption?
Equally important is what the guidelines exclude. A wide range of remote gaming services - including online casino, RNG games, live casino, online betting, and poker - are not listed as exempt.
For many Malta-licensed operators, this means a material reclassification of supplies from exempt to taxable.
Practical implications for operators
By narrowing and clarifying the exemption, the guidelines effectively outline taxable vs exempt activities. This has two key consequences:
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greater certainty in VAT classification, reducing interpretative ambiguity; and
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potential input VAT recovery on costs linked to taxable activities (e.g. technology, marketing, and professional services).
This aligns with broader policy objectives to ensure VAT neutrality while enhancing the competitiveness and sustainability of Malta’s gaming sector.
The VAT recovery upside
This reclassification is not merely technical - it has direct financial implications.
Historically, operators making predominantly exempt supplies were restricted in their ability to recover input VAT, often leading to high irrecoverable costs.
Under the new framework:
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a reduced proportion of exempt without credit supplies; and
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a higher share of taxable activities
should result in improved input VAT recovery rates.
This is particularly relevant for high-cost areas such as software development, IT infrastructure, marketing spend, and outsourced services, where VAT leakage has traditionally been significant.
Next steps for operators
With an effective date of 1 October 2026, operators have a limited window to act. Key steps include:
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reassessing VAT classifications across products and verticals;
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revisiting cost allocation and VAT recovery calculations;
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evaluating structuring and supply chains to optimise VAT outcomes; and
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quantifying the potential cash-flow and cost benefits from increased recovery.
Final remarks
While L.N. 86 of 2026 laid the legislative foundation, these guidelines represent more than clarification - they mark a shift in the economic VAT model of the gaming sector in Malta.
For many operators, the move away from an “exempt without credit” position towards greater taxability could unlock significant VAT efficiencies, provided the changes are actively managed.