On the 1st of January 2024, Legal Notice 272 of 2023 – Value Added Tax (Reporting Obligations for Payment Service Providers) Regulations, 2023 will come into force. This legal notice transposes the EU CESOP Directive (2020/284) which introduces new reporting obligations for PSPs through the Central Electronic System of Payment Information (CESOP) into Maltese VAT legislation.

PSPs whose home or host Member State is Malta (including foreign PSPs passporting into Malta) and provide payment services in accordance with the criteria set out under the Regulations have to notify the Commissioner for Tax and Customs ("Commissioner"), who, in turn, has a duty to report this data to the European database – the CESOP. Any PSP established in Malta or has Malta as its host member state has to notify the Commissioner by applying to be registered as a PSP within 25 days from the 1 January 2024 or the date Malta becomes the home or host member state of the PSP, whichever is the later.

Any PSP registered under this Regulation that no longer has Malta as its home or host must notify the Commissioner within 15 days.

The PSP will have the following obligations:

  1. Store detailed information and documents on payees and payments in relation to the payment services provided as set out in the Legal Notice, for every calendar quarter, which must be kept for 3 calendar years from the end of the calendar year of the date of the payment;
  2. Notify the Commissioner electronically through the web portal by duly applying to be registered as a PSP under the Regulation;
  3. Submit a report to the Commissioner with the information of the payee and payments once the threshold as further detailed below has been reached.

The PSP is subject to retain information and report to the Commissioner, on payees and payments where within a calendar quarter, the PSP provided more than 25 cross-border payments per payee and per member state for the purposes of the CESOP. A payment is classified as cross-border if the payer is in one member state and the payee is located in another member state or third country.

Submission and Deadline

The report with the relevant information and document of the payee or payments must be submitted electronically through the web portal or any means as approved by the Commissioner.

The information to be reported to the Commission must be submitted by no later than the 28th day of the month following the calendar quarter. The Commissioner may notify the PSP where the information is valid or may request that further information or documents be submitted in order to complete the reporting obligation.

Upon the Commissioner receiving the information from the PSP, it will subsequently be sent to CESOP. The database will centralise all the information received by the PSPs from all the Member State for the purpose of examining the data by anti-fraud experts. Failure by the PSP to submit the information required shall give rise to the imposition of administrative penalties.

It is crucial that qualifying PSPs adopt the necessary measures to ensure that a system is in place to guarantee a smooth transition for the PSP to remain compliant and to be able to retain and store the necessary information and submit the required reports.

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.