‘Attractive’ gaming tax overhaul set to boost Malta’s competitivity, say authorities

Malta’s upcoming reforms to the VAT and gaming tax frameworks are expected to strengthen the jurisdiction’s competitiveness, according to the Malta Gaming Authority (MGA), allowing operators to recover VAT costs and offering a predictable tax environment.

The reforms are expected to significantly reshape how the sector is taxed, with both the MGA and the Malta Tax and Customs Administration (MTCA), indicating that the changes go beyond a technical update and instead represent a coordinated shift in policy.

Set to take effect on 1st October 2026, the reforms follow Legal Notices 84 and 86 of 2026 and are positioned as part of Malta’s broader strategy to enhance regulatory clarity, improve tax efficiency, and strengthen the jurisdiction’s competitiveness.

At the core of the new “attractive framework” is a significant recalibration of the VAT treatment of gambling services. The MTCA tells iGamingCapital.mt that the exemption has been “significantly narrowed” through guidelines published on 6th April 2026.

They explain that the exemption will now apply only to specific categories of gambling, namely low-risk games, junket events, and certain forms of betting tied to live sporting or competitive events that are accessible only at the physical location where the event takes place.

Similarly, the MGA confirms to this newsroom that the exemption has been “extensively limited” to the gaming services outlined in the MTCA’s guidelines, reinforcing a more targeted application of VAT rules across the sector.

This marks a departure from the broader exemption regime previously in place and reflects an effort to better align VAT treatment with the economic reality of different gaming verticals.

Both authorities point to a key benefit arising from the changes: improved input VAT recovery.

The MTCA notes that as more gambling services become subject to VAT, operators will be able to recover input VAT on costs linked to those taxable supplies. This is expected to significantly simplify VAT recovery calculations and processes.

The MGA echoes this view, stating that the reforms will “significantly improve VAT recovery overall,” replacing what it describes as a more restrictive model. The updated framework is also expected to streamline how input VAT recovery is calculated, reducing administrative complexity for operators.

The shift is also likely to benefit Malta-licensed B2B service providers, as their services will increasingly be supplied to VAT-taxable operators, potentially enhancing the overall efficiency of the ecosystem.

Transitional adjustments expected, but no major burden

In terms of implementation, both the MTCA and MGA acknowledge that operators will need to make initial adjustments, particularly in relation to internal processes, calculations, and reporting.

However, the MTCA indicates that, based on industry feedback, these changes are not expected to pose a significant administrative burden once business processes are recalibrated. The MGA similarly describes the adjustments as “manageable and transitional,” noting that the deferred implementation date and supporting guidance should allow sufficient time for adaptation.

Streamlined gaming tax framework complements VAT changes

Alongside the VAT updates, the MGA is introducing reforms to the gaming tax framework, including the consolidation of existing gaming tax and gaming device levies into a single structure, as well as more simplified and equitable tax rates.

While detailed commentary from the regulator focuses primarily on VAT, the broader reform package is designed to work in tandem, creating a more coherent and predictable indirect tax environment for operators.

Competitiveness and regulatory clarity in focus

Both the MTCA and MGA frame the reforms as a positive development for Malta’s position as a gaming jurisdiction, with the MTCA saying they “respond directly to feedback received through ongoing engagement with the gaming industry.”

They emphasise that the changes form part of the Government’s commitment, outlined in the 2026 Budget, to safeguard the sector’s long-term sustainability, competitiveness, and regulatory certainty. They describe the resulting framework as “clear, simple and streamlined,” particularly in relation to indirect taxation and VAT recovery.

The MGA similarly states that the reforms are expected to strengthen Malta’s competitiveness by providing a clearer VAT framework, a more predictable tax environment, and streamlined gaming taxes. Together, these measures are intended to reinforce Malta’s standing as a stable and forward-looking base for regulated gaming operators.

Substance requirements remain key consideration

Despite the more favourable and simplified framework, the MTCA highlights an important consideration for operators: the reforms apply only to those carrying out the main functions of their gaming activities in Malta.

As such, businesses will need to ensure they have sufficient operational substance in Malta to support their establishment status, both in terms of input and output supplies. This point is likely to be particularly relevant for operators reviewing their structures in light of the new rules.

Taken together, the reforms suggest a broader recalibration of how the gaming sector is taxed in Malta. By narrowing VAT exemptions, enabling greater input VAT recovery, and aligning gaming-specific taxes within a simplified framework, the changes aim to reduce inefficiencies while improving clarity.