2015 Malta VAT Changes
As of the 1st of January 2015, telecommunications, broadcasting and electronic services supplied to consumers based in the EU will be taxable in the Member State of the customer. The changes only apply to e-services which are automatically delivered over the internet, or an electronic network, where there is minimal or no human intervention. The changes are primarily targeted as suppliers of e-books, app providers, suppliers of advertising space, suppliers of music downloads and to online gaming operators.
The amendments to the VAT directive have forced a shift from a point of supply based mode of taxation to a point of consumption tax. Therefore, the rate of tax chargeable in the country of establishment is no longer relevant for suppliers of telecommunications, broadcasting and electronic services and the supplier is now required to charge the VAT to their customers at the rate applicable in EU Member State of its customers. The supplier which sells electronically supplied services to consumers based in other jurisdictions must also report to that jurisdiction in which the sale was made, by submitting the applicable VAT return, and must also pay the VAT to the tax authorities within that jurisdiction, which VAT must have been collected from the consumer during the sale. VAT reporting to all jurisdictions in which sales are made can be carried out through a simplified Mini One Stop Shop system.
The place of consumption of the consumer is considered to be the place where the consumer is established, i.e. the place where the consumer habitually resides.
Read More on this: Impact on the Gaming Industry