The Maltese government has recently approved a measure that would allow for betting on events, including sports ones, to be exempt from Value Added Tax, local news outlet Times of Malta reported. The measure will come into force on January 1, 2018.

According to a publication in the Government Gazette from earlier this week, betting and wagering as well as the services provided by bookmakers, betting exchanges, and similar entities will no longer be required to pay a VAT.

The Government Gazette publication further clarified that wagers that will be exempt from the tax from next year will include those placed on both actual and virtual sports events, lotteries, competitions, and even bets on the way a natural disaster and an index performs.

The VAT exemption notice pointed out that the exemption from the tax in regard to gambling is outlined in the nation’s Value Added Tax Act. It is also compliant with a Council of Europe directive in relation to the implementation of a common VAT system. Under said directive, individual member states can exempt gambling from VAT subject to their own regulatory limitations and conditions.

Malta generated VAT revenue of more than €700 million last year, which represented around 7% of its annual Gross Domestic Product. According to information from World Bank, the Mediterranean island nation’s GDP exceeded €9.3 billion. It is yet unclear how much the new VAT exemption regulation would affect the nation’s economy and how losses would be offset.

As already mentioned, the new taxation regime will only concern betting on events. Wagering on the outcome of casino table games, including blackjack, roulette, poker, or any other casino-style game of chance, will not be exempt from VAT as from January 1, 2018. Any gambling services provided through the use of remote technology will also not be exempt.

Lotto and lotteries are currently the only gambling services that are exempt from the tax.

The new VAT requirements come at a time when Malta’s gambling industry is preparing for a number of regulatory changes. Earlier this year, the Malta Gaming Authority, the agency tasked with regulating the nation’s gambling industry, published a white paper proposing a number of reforms.

The proposed changes include, among other things, the replacement of the current multi-license system with one that will grant only two licenses depending on the type of activity conducted by the applicant. At present, providers and operators of different types of gambling services are required to obtain different licenses. Under the new system, there will be only a business-to-consumer license and a business-to-business license.

Malta’s lower taxes have over the years turned the nation into one of the most popular hubs for both gambling operators and service providers. However, the Mediterranean country has also been subject to criticism for possibly failing to implement harsher money laundering prevention and combating tools. Earlier this week, the Maltese government published amendments to the Prevention of Money Laundering Act, signed by President Marie-Louise Coleiro Preca. The reforms are aimed to strengthen the nation’s anti-money laundering policies.

The post Malta to Exempt Betting from VAT appeared first on Casino News Daily.