As VAT rate changes become more commonplace with greater freedoms afforded to EU Member States to dictate their own VAT rates, we can expect to see many more EU Member States autonomously elect to modify their VAT rates, in line with their own fiscal agenda. The practice is becoming more routine in Europe because of these freedoms, and also as countries seek to restore tax rates to what they were prior to the Pandemic. Kofax is acutely aware of this changing VAT landscape in Europe and will implement VAT rate changes for each of its compliant territories as part of its e-invoicing solution, considering this shifting paradigm.

The latest country to implement a new VAT rate change is Malta, which has introduced a new reduced VAT rate of 12%, in addition to other reduced VAT rates in the country, which will continue to co-exist alongside the new 12% rate. Use of the new 12% rate is expected to be fairly limited, applying in the following niche scenarios:

• Custody and management of securities
• Management of credit and credit guarantees by a person or body other than those who granted the credit
• Hiring of a specific boats
• Specific services relating to health care.

The new 12% reduced VAT rate has now been published in Legal Notice No. 231 of 2023 in the Official Gazette and will be effective from 1 January 2024.

Malta is a compliant territory for Kofax and we will support the new reduced VAT rate as part of our e-invoicing solution in readiness for the 1 January 2024 inception date.

We will be in touch shortly with affected Maltese suppliers and buyers.