A new tax framework is now in force
Malta’s gaming tax and VAT changes took effect on 1 October 2026. For an industry that has built much of its European business on Malta licences, the reform is the biggest change to the island’s gaming tax structure in years. Operators who have not yet reviewed their numbers should do so now rather than at the next filing deadline.
The reform arrives through two legal notices published in April 2026. Legal Notice 84 of 2026 amends the Gaming Tax Regulations, while Legal Notice 86 of 2026 changes the VAT treatment of gambling and betting. The Malta Gaming Authority and the Malta Tax and Customs Administration announced the enhancements together, presenting them as a clearer and more predictable framework for operators.
What changes on gaming tax
Until 30 September 2026, gaming tax was a flat 5 per cent of gaming revenue across all game types. From 1 October it moves to a differentiated structure. Type 1 gaming services, which include casino games, lotteries and random number generator games, pay 15 per cent of aggregate gaming revenue.
The gaming device levy is also being abolished and folded into the unified gaming tax. Transitional rules tied to the old device-levy model fall away at the same time, which simplifies the calculation for operators holding several licence types.
Published summaries differ on the rates for the other licence types. One professional services firm sets out 10 per cent for Type 2, Type 3 and Type 4 services. Because the detail changes the numbers, confirm each rate against the text of Legal Notice 84 of 2026 before relying on it in a forecast.
What changes on VAT
The VAT change is the one that catches more businesses out. Gambling and betting are now generally treated as taxable supplies for VAT purposes. The exemption has been cut back to three defined cases: low-risk games, junket events approved by the Malta Gaming Authority, and physical bets taken solely at the event venue.
That shift affects both sides of the ledger. Output VAT rises on activities that were previously exempt, but operators may also be able to recover more input VAT on costs. The change does not make all input VAT deductible from 1 October, so the actual use of each cost still needs checking.
Capital goods deserve particular attention. Where an operator bought assets while carrying out exempt activities, a change in how those assets are used for taxable activities may allow extra input VAT recovery under Malta’s Capital Goods Scheme. Finance teams should review major fixed assets with that in mind.
Contracts that span 1 October
Contracts and invoices that run across the date need to be split. For continuous supplies, the period before 1 October generally stays under the old treatment, and the period after is taxed under the new rules. Some operators may need to issue corrective invoices, even where the original invoice was issued as exempt before the change.
That is an operational task, not only a tax one. Billing systems, reporting tools and contract records all need to reflect the new split, and the work is easy to underestimate.
A practical checklist
Most operators will benefit from working through a simple sequence before their next reporting cycle:
- Classify each gaming activity and confirm whether it sits within one of the three remaining VAT exemptions.
- Identify every contract and invoice that covers periods on both sides of 1 October.
- Check the gaming tax rate for each licence type against the legal notice itself.
- Review capital assets to see whether any extra input VAT recovery is available.
- Update billing, ERP and reporting systems so the new treatment is applied consistently.
Why the reform matters beyond Malta
Malta has long been the European base of choice for many online gaming businesses. The reform reflects a wider pattern across European jurisdictions, where governments are re-examining how gambling is taxed and who pays. For operators, the question is whether Malta’s package keeps the island competitive against the alternatives, and some commentators have already started comparing it with other centres.
The authorities say the changes were shaped by industry feedback during consultation, and they describe the package as well balanced. That framing will be tested once operators see how their own tax bills change in the first full reporting periods under the new rules.
Who feels the change most
The impact is not evenly spread. Operators whose revenue sits mainly in Type 1 services will see the new 15 per cent rate apply to most of their gaming revenue, which makes the change easy to model. Multi-licence groups have a harder job, because each licence type may sit under a different rate and each may carry different VAT treatment depending on where the players are and how the service is supplied.
Smaller operators may feel the operational side most. A business with a few contracts and a single billing system can usually switch treatment on a given date. A larger group with suppliers, affiliates and intra-group charges across several entities has far more invoices to classify, and each one needs a decision about which side of 1 October it falls on.
Suppliers and service providers are affected too. A platform or software business that charges Malta-licensed operators may find that its customers now ask for different invoicing, or that they want to renegotiate terms to share the new VAT cost. Those conversations are worth starting early, before the first filing under the new regime exposes a mismatch.
Cash flow and reporting
Higher gaming tax is a cash flow question as well as a cost question. Operators should model the timing of payments under the new regime, not just the annual total. Where VAT is now payable on activities that were previously exempt, the working capital needed to fund those payments may be significant for businesses with thin margins.
Reporting systems need the same attention. Returns that once reflected a simple flat rate now need to separate activities by type and by period. Finance teams should run a trial calculation on a sample month before relying on the new output, because errors in the first returns can be the hardest to unwind.
It also helps to keep a clear paper trail. Records should show how each activity was classified, which legal notice or guidance was applied, and who approved the treatment. If the tax authority later questions a position, a documented decision made at the time is far easier to defend than an explanation assembled afterwards.
Common mistakes to avoid
- Applying the old 5 per cent rate to activity that now falls under the new structure.
- Treating a whole contract as one period when it spans 1 October and needs to be split.
- Assuming all input VAT becomes recoverable from the first day of the new regime.
- Relying on a secondary summary of the rates rather than the legal notice itself.
Our analysis
One possible reading is that the rate change is the headline, but the VAT change is where most of the operational work sits. The figures suggest, though do not confirm, that many operators will spend more time on reclassification and invoice corrections than on the gaming tax calculation itself.
Final thoughts
Malta’s reform is now in force, and the early months will show how smoothly the new rules work in practice. Operators who have not yet mapped their contracts and assets against the new VAT position should prioritise that work, because errors around the 1 October boundary are the most likely source of audit trouble.
Keep following Business of iGaming for updates on Malta and other licensing centres, and reach out if you want help understanding how these changes affect your business model.
