Reduction in fines for late VAT payers in Malta

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The tax office in Malta has advised that it is to reduce the fines for late VAT payers and improve communications with taxable persons looking to bring their non-compliant affairs up-to-date. The Customs and VAT departments will also be merged to simplify communications, as well as to improve audit co-operation between the departments.

The charges for fines are as follows:

  • The daily penalty for late returns and payments of €15 will be scrapped.
  • The late penalty interest will be reduced from 9% to 6.5%.
  • There will also be a maximum fine limit to prevent disproportionate fines building up.
  • Any repayments of VAT will now initially be set off against outstanding tax and then fines rather than against fines first. This should prevent compounding of fines.