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Following the publication of yesterday’s Guidelines, the Malta Tax and Customs Administration (MTCA) has today issued two further sets of guidelines:
- Guidelines on the VAT treatment of Electronically Supplied Services, effective as from 01 October 2026; and
- Guidelines on the place of supply of streamed and virtual activities.
These Guidelines clarify which gambling and betting products qualify as (i) electronically supplied services (ESS) and (ii) streamed and virtual activities. This classification is important as in both instances VAT, if applicable, is due in the country where the player is located and not where the gambling operator is located.
The principal takeaways for gambling operators as from 01 October 2026 are the following:
- The supply of online gambling and betting is no longer VAT-exempt when provided to players in Malta. Consequently, gambling operators can fully recover input VAT on their expenses. The right of recoverability applies also if the players are not located in Malta.
- The offering of a facility for the placing of bets on the internet or via an electronic network in connection with any event (including sportsbook) qualifies as ESS. This means that the right to charge VAT rests with the country in which the player is located, if applicable.
Moreover, in line with the updated VAT rules for entertainment services, effective from 1 January 2025, it is now clarified that live casino services are covered by these rules. Accordingly, VAT, where applicable, is payable in the country in which the player is located. That is, if the players are not located in Malta, no Maltese VAT would be due, however, the operators will still have the right to recover input VAT on expenses related to the provision of live casino on the basis that now live casino will be subject to VAT in Malta.
ESS Guidelines in the Context of Online Gaming
A service qualifies as ESS where it is delivered over the internet, is essentially automated with minimal human intervention, and cannot be provided without information technology. Where these conditions are met, VAT follows the player. In other words, the obligation to charge VAT arises in the jurisdiction where the player is established.
The following gaming services are confirmed as qualifying ESS:
- Sportsbook – the online placement and automated processing of bets on any event, live or otherwise.
- RNG casino and poker – fully automated games where players are geographically remote from one another and no staff involvement affects the outcome.
- Online bingo – whether system-generated or streamed, provided the platform handles player selections and identifies winners automatically.
Streamed and Virtual Activities Guidelines: Live Casino as Entertainment Services
Live casino does not qualify as ESS. The presence of a live dealer constitutes human intervention, which takes the service outside the ESS definition. Instead, live casino is classified as an entertainment service, specifically, casino-type games conducted in real time by a physical dealer in a studio environment, captured and streamed to players who participate remotely through an electronic interface. VAT continues to follow the player’s location, but the legal basis is distinct, and compliance frameworks should reflect this accordingly.
What This Means for Malta-Based Operators
Remote gambling operators established in Malta are entitled to recover input VAT incurred in the ordinary course of their economic activity. Maltese VAT is chargeable only on supplies made to players located in Malta.
Where players are located outside Malta operators remain eligible to recover input VAT, even if the relevant supplies are treated as VAT‑exempt in the player’s country of consumption.
The Framework as a Whole
Three sets of guidelines published across two days now provide a coherent and interlocking framework addressing the scope of the gambling VAT exemption, the definition of ESS, and the place-of-supply rules for streamed and virtual activities. Taken together, they offer operators a considerably clearer basis on which to structure their VAT compliance.
The effective date of 1 October 2026 affords operators adequate time to review their supply structures and compliance arrangements in light of these developments.
We expect that further clarifications will be issued on the taxable base over the coming days.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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