Tax evolution within the iGaming sector

The iGaming landscape is undergoing a fundamental fiscal transformation. Historically, tax advisory for the sector focused on maintaining high-level corporate structures; however, it has evolved into a high-stakes operational necessity due to the sweeping reforms taking effect on 1st October 2026.

The Evolving Role of Tax Advisory

Tax advisors in Malta are transitioning from "compliance keepers" to "strategic architects".

Beyond Filing: Modern advisory now involves deep-mapping product verticals (e.g., RNG vs. Live Casino) to determine their specific VAT and gaming tax treatment.

Regulatory Integration: Advisory now overlaps with regulatory requirements, such as MiCA (effective July 2026) for platforms using crypto-assets, requiring precise coordination between legal and tax teams.

Optimisation Imperative: With the narrowing of exemptions, the primary goal of advisory is now VAT neutrality – ensuring that VAT becomes a recoverable business variable rather than a sunk cost.

Legal and Fiscal Requirements

To operate as an iGaming entity in Malta, companies must meet stringent criteria:

Company Setup: Applicants must be established as a Maltese legal entity.

Minimum Capital: Requirements range from €40,000 to €100,000, though some advisors suggest budgeting significantly more for local staffing and safety buffers.

AML Compliance: Annual risk assessments must be submitted to the Financial Intelligence Analysis Unit (FIAU).

Economic Substance: Companies must demonstrate genuine commercial logic and management in Malta to qualify for the full imputation system.

Tax Approach: The Full Imputation System

While the statutory corporate tax rate is 35 per cent, Malta's full imputation system remains the gold standard for iGaming operators.

Effective Rate: Through a shareholder refund mechanism, the effective tax burden can often be reduced to approximately 5 per cent for eligible trading income.

Cash Flow Management: Since refunds are not instant, incorporating these timelines into structured cash-flow planning should be emphasised.

Consolidated Gaming Tax: Effective 1st October 2026, the device-based levy is abolished. The single 5 per cent tax on gaming revenue is to be replaced by differentiated rates as follows:

• Type 1 Games: 15 per cent of aggregate gaming revenue.
• Type 2, 3, & 4 Games: 10 per cent of aggregate gaming revenue.
• Controlled Premises/Junkets: 5 per cent of aggregate gaming revenue

Critical VAT Updates (Effective 1st October 2026)

Following Legal Notices 84 and 86 of 2026, the scope of VAT exemptions has been significantly curtailed.

1. Narrowed Exemptions

Only three specific categories will remain exempt without credit:

Low-risk games (as defined by MGA regulations).

Occasional junket events (non-routine and specifically approved).

On-site physical betting (facilities physically accessed at a sporting event).

2. Reclassification of Supplies

Most modern remote gaming services will now be treated as taxable supplies:

Sports Betting & Live Casino: Previously treated as exempt, these will largely fall within the scope of VAT from October 2026.

Electronically Supplied Services (ESS): Online gambling and betting are now explicitly classified as ESS. For B2C transactions, VAT is due where the customer resides.

Place of Supply: Live casino services are now treated similarly to entertainment activities, with VAT due in the customer's jurisdiction.

3. The Recovery Upside

The shift from "exempt" to "taxable" allows operators to reclaim Input VAT on major cost centers – including technology infrastructure, marketing, and professional services – that were previously irrecoverable "VAT leakage".