Malta overhauling gaming tax and VAT frameworks
- Malta is consolidating its gaming tax and gaming device levy into a single unified tax, classified by game type, though the new rates have not yet been published.
- The VAT exemption for gambling is being narrowed, meaning online betting and casino products supplied to players in Malta will become taxable from 1 October 2026.
- Both changes improve input VAT recovery rights for operators and give land-based and online businesses equal treatment under the new framework.
The Malta Gaming Authority and Malta Tax and Customs Administration have jointly announced a significant overhaul of the country’s gaming tax and VAT frameworks, with changes set to take effect on 1 October 2026. The new tax rates have not yet been published.
The Malta Gaming Authority (MGA) and the Malta Tax and Customs Administration (MTCA) published Legal Notice 84 of 2026 (gaming tax) and Legal Notice 86 of 2026 (VAT) on 1 April, confirming the changes will enter into force on 1 October 2026.
The authorities described the package as a direct response to industry feedback, and part of the government’s commitment to the long-term sustainability and competitiveness of Malta’s gaming sector.
Tax structure reform
Currently, online operators pay a flat 5% gaming tax on GGR generated from players located in Malta, alongside a separate gaming device levy for land-based activity. The reforms replace this dual structure with a single unified tax and introduce a new studio broadcasting levy.
The consolidated structure will be classified according to game type and mode of offer, and will apply exclusively to gaming services provided within the territory of Malta.
The MGA is introducing simplified and equitable rates for both land-based and online operators, applicable to GGR from players located in Malta. The specific new rates have not been disclosed and are expected to be set out in forthcoming implementation guidance from the MTCA and MGA.
The changes sit within a broader fiscal strategy outlined in Malta’s 2026 Budget, where the government committed to developing a more reliable indirect tax framework for value-adding industries, including gaming. Malta’s economy grew at 3.1% in 2025, well above the EU average, with gaming widely regarded as a key contributor through the export of services.
VAT exemption narrowed
The VAT changes represent the more consequential shift for operators. Legal Notice 86 of 2026 amends item 9 of Part Two of the Fifth Schedule to Malta’s VAT Act, tightening the scope of the VAT exemption for gambling with effect from 1 October 2026.
From that date, the supply of online gambling and betting will no longer be VAT-exempt when provided to players in Malta. The scope of the VAT exemption will be clarified in particular for sports betting and certain casino offerings, alongside updated guidance on how place-of-supply rules apply. As a result, gambling operators will be able to fully recover input VAT on their expenses.
Under the current regime, operators making largely exempt supplies are restricted in the amount of input VAT they can recover on their costs. A narrowing of the exemption, meaning more supplies become taxable, should in principle increase the proportion of input VAT that operators are entitled to recover.
Certain categories will retain their exempt status. Low-risk games as defined under the Gaming Authorisations Regulations qualify for VAT exemption without credit, as do approved junket events held on a non-routine basis, and facilities for in-person betting at live sporting events.
The MTCA issued VAT guidelines on 6 April 2026, providing further practical direction on how the new exemption scope will apply across different product categories.
Further iGaming industry implications
The authorities have signalled further guidance is forthcoming ahead of the October deadline. The MTCA and MGA confirmed that additional information will be issued in due course to support implementation and ensure clarity for all affected stakeholders.
For operators, the reforms carry both compliance demands and commercial opportunity. The transition period until 1 October 2026 allows operators to map their supplies against the new guidelines and determine which activities remain exempt and which fall into taxable treatment.
The tax overhaul arrives as the MGA focuses its supervisory energy elsewhere. The regulator recently set crypto and esports as its 2026 supervisory priorities, alongside a risk-based approach to compliance and player protection. The tax reform adds a further operational layer for licensees to absorb before the year is out.
Malta has also been positioning itself at the forefront of digital gaming regulation more broadly, with its Economy Minister signalling that the island is exploring a dedicated framework for prediction markets regulation in the EU. The combined regulatory moves reinforce Malta’s strategy of attracting and retaining high-value gaming businesses through regulatory clarity.
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