Proposed reform

VAT reverse charge in construction

For covered construction transactions the buying business, not the supplier, accounts for VAT.

Budget 2027Rules pending

Amount

Not specified

No direct comparator

Effective from

Awaiting guidance

What it means

The purchaser business must calculate and declare VAT due on the purchase. It may deduct the same VAT only if eligible under law. VAT is not paid to the supplier under this mechanism. Detailed covered transactions and commencement date are not specified in the speech.

Affects: Companies & SMEs.

Who qualifies and what is excluded

Applies only to transactions brought within the new mechanism.
Purchaser's deduction is subject to legal eligibility.
Exception: No claim that all construction transactions are covered; scope remains to be specified.

Sources

Diskors tal-Budget 2027, Ministry for Finance (Malta), 2026-10-26. Printed p. 43 (PDF p. 47)

Related measures

Budget 2027Rules pendingProposed reform

Small company 25% tax on retained profit

A 25% tax rate on retained or reinvested profit is announced for qualifying companies with turnover not above €1 million, compared with 35% on distributed profit.

25% on retained profit

Proposed rules; implementation not confirmed.

Speech printed p. 34 · PDF p. 38

Budget 2027Rules pendingProposed reform

Taxation of air space transfers

New rules require fuller disclosure of the total price in development deals involving the sale of air space.

Proposed rules; implementation not confirmed.

Speech printed p. 42 · PDF p. 46

Budget 2027AnnouncedBudget measure

Administrative penalties for missing VAT receipts

Penalties of €100, €200, €400 and then €500 apply for successive failures to issue correct invoices or receipts within 24 months.

€100 / €200 / €400 / €500

Speech printed p. 44 · PDF p. 48