4 changes for Malta digital nomads in the new VAT overhaul

What changed in Malta's 2026 tax overhaul

Malta enacted the Budget Measures Implementation Act, 2026 on March 10, tightening VAT treatment for foreign-owned and cross-border businesses while opening a 175% super-deduction for qualifying research, development and innovation spending. Most VAT changes took effect Jan. 1, with structural e-commerce items tied to the EU's VAT in the Digital Age rules phasing in through 2027 and mid-2029.

The law rewrites three things that matter for anyone running a business from Malta: VAT registration duties for non-resident entities, a default rule that advertised prices are VAT-inclusive and open-market-value pricing for related-party transactions. It also extends "deemed supply" treatment to services given free of charge for private use when input VAT was claimed.

Who feels it

Foreign-owned Malta companies, remote-first structures and digital nomads running operations through a Maltese entity face the heaviest compliance shift. Non-resident businesses making taxable supplies in Malta must register for VAT from the first taxable transaction, with no general threshold. EU sellers shipping B2C goods to Maltese consumers still work to a €35,000 ($37,800) distance-selling threshold, though OSS schemes are pulling more sellers into single-registration regimes.

Hospitality, coworking, retail and tourism-facing operators take a direct hit from the inclusive-pricing rule. Menus, accommodation rates, day passes and tour prices from VAT-registered suppliers must show the VAT-inclusive figure. Separate "+ VAT" pricing is acceptable only for clearly B2B sales to VAT-identified customers and the exclusion must be stated explicitly.

Cross-border groups face a second layer. Intra-group invoices between a Malta company and a foreign affiliate may need open-market-value pricing for VAT purposes if one party has limited input VAT recovery, on top of Malta's existing transfer-pricing rules.

What to do next

Operators should audit three areas before the next VAT return: registration status for any non-resident arm trading into Malta, public-facing price displays for inclusive presentation and intra-group service pricing against open-market benchmarks.

Companies with genuine R&D activity should map 2026 spending against the 175% deduction, which applies from year of assessment 2027 to persons engaged in a trade or business, including foreign-owned Malta entities and permanent establishments meeting the conditions.

Read our full Malta guide for the complete picture.