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Financial statements audits
Financial statements audits
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Financial statement reviews
Financial statement reviews
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Financial statements compilations
Financial statements compilations
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IFRS
IFRS
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Audit quality monitoring
Audit quality monitoring
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Global audit technology
Global audit technology
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Systems and risk assurance
Systems and risk assurance
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General business consulting
General business consulting
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Market research
Market research
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Sustainability
Sustainability is indeed a broad concept. Aside from mitigating the environmental changes caused by the interaction of the industrial world and society with nature, social and governance matters are subjected to increased public and government scrutiny, calling for the promotion of a sustainable performance agenda.
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Business planning and performance improvement
Business planning and performance improvement
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Change and program management
Change and program management
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Business intelligence and analytics
Business intelligence and analytics
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Business valuation and litigation support
Business valuation and litigation support
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Business process outsourcing and consulting
Business process outsourcing and consulting
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Family business consulting
Our business solutions for family businesses center on alignment of all aspects of the family and business, including culture, vision, mission, values, governance, ownership, leadership, communication and policy development.
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Quantitative small caps
Grant Thornton has a wide professional network with a vast array of technical skills that is coupled with a drive to understand the business problem; we can set up the most efficient financial risk management structure that fits your underlying business structure and your risk appetite.
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Data analytics
Data analytics is the process through which businesses leverage data to gain actionable insights and enhance their performance. This is based on a solid foundation of well-organised and accurate data. Many businesses have a large amount of data at their disposal however, most of them do not have the expertise to analyse the available data.
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Grants and Funding
At Grant Thornton, we specialise in providing comprehensive assistance to navigate the complex landscape of National and European Union (EU) funding. Our team of experts are dedicated to assisting you to access the financial resources you require to turn your vision into reality.
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Bookkeeping & financial accounting
Bookkeeping & financial accounting
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Payroll and personnel administration
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Direct and Indirect tax compliance
Tax compliance within outsourcing
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Compilation of financial statements
Compilation of financial statements
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Business process outsourcing
Business process outsourcing including back office and secretarial
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Family business consulting
Family business consulting
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Startups
Startups
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Company formation
Company formation
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BOR
Entities in Malta, including companies, partnerships, foundations, trusts and associations, have an obligation to disclose the ultimate beneficial owner/s (physical person) of the entities. A beneficial owner is defined as the individual (s) who ultimately owns or controls a legal entity or arrangement through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity.
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Internal audit
Internal audit
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Risk management and internal controls consulting
Risk management and internal controls consulting
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Governance and risk management
Governance and risk management
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Regulatory services
Regulatory services
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Risk modelling services
Risk modelling services
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Forensic and investigation
Forensic and investigation
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Compliance audit
A compliance audit is a detailed review which focuses on whether an organisation is in conformity with statutory laws as well as internal rules and decisions. This type of audit also assesses the effectiveness of an organization’s internal controls by identifying weaknesses in compliance processes whilst finding measures to enhance such processes.
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Citizenship by naturalisation
The Maltese Citizenship Act (Cap 188) establishes who may become a citizen of Malta by naturalisation, provided that the applicant satisfies the relative provisions.
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Citizenship for Exceptional Services by Direct Investment
With the continuously changing global dynamics and evolving geopolitics, there is an ever-growing number of highly-talented high-net-worth individuals who are willing to invest and relocate to give themselves and their family members the chance to broaden their horizons and become part of a welcoming community.
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Grant of Citizenship for Exceptional Services
Malta has enacted legislation which extends to individuals providing excellent or manifestly superior contributions in the fields of science, research, sports, arts and culture as well as people of exceptional interest to the Republic of Malta, the right to become Maltese citizens.
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Acquisition of citizenship by registration
The Maltese Citizenship Act (Cap 188) establishes who can register as a citizens of Malta. The Act was amended on 1st August 2007, this making it possible for second and subsequent generations born abroad to acquire Maltese citizenship by registration.
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Maltese Family Businesses Resource Centre
For over 30 years Grant Thornton’s advisory teams have assisted family businesses in navigating the challenges of leadership and succession across generations
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Grooming
Preparing the next generation for leadership and ownership is an integral part of any succession process. Grant Thornton can help formulate the necessary grooming plan for all the potential successors.
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Tax services
Using a combination of reason and instinct, we can work with clients to develop a strategy that helps them understand and manage their tax liability in a transparent and ethical way.
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Access to finance
Like all companies, family businesses need finance. As an ongoing business concern looking at expanding, when it comes to raising capital, it’s important that this is done wisely to minimise the risk of collateral damage.
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Governance
Having a proper governance structure is essential to ensure that the family and business strategies are achieved. Grant Thornton can advise on this, and facilitate the implementation of the ideal governance structure based on the exact scenario.
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Ownership succession
Letting go of your family business is difficult for all owners and even more so for founders; however, in a family business the additional challenge presented by the family component increases the complexity of this process. Our team of family business advisors will ensure that such ownership issues are dealt with in an effective and structured approach.
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Exit strategies
There are many 'exit strategies' that need to be considered to minimise the risk of conflict. They can arise from the eventual exit of a family member from the ownership ranks and can have many causes. See how we can help.
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Management succession
By implementing our family business guidelines to family succession and a proper governance structure, the management succession process can be completed with minimal conflict and will result in the most competent successor being chosen.
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DORA Consultancy
Firms within the financial sector face a critical imperative to fortify their operational resilience in the digital sphere, particularly with the advent of the Digital Operational Resilience Act (DORA), set to take effect by January 2025.
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Cyber security Consultancy
Whether you are a multinational corporation, a small business, or an individual, the digital realm holds equal importance for us all.
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IT business consultancy
IT business consultancy serves as a crucial bridge between technical solutions and strategic business objectives. Through comprehensive analysis, we identify opportunities for efficiency and innovation, providing actionable recommendations to enhance processes and maximise ROI.
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Technology Implementation & Project Management
Efficiently implementing new technologies or upgrading existing systems demands meticulous planning, strategic execution, and seamless integration. GT serves as a guiding force, steering businesses through complexities and facilitating a structured approach to technology adoption.
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IT Audit and Assurance
Information systems strengthens an organisation’s financial and operational processes. Grant Thornton Malta strengthens your organisation’s need for IT and information assurance.
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Case Studies
Digital transformation has transitioned from being an option to a necessity. The race is on... The question is, are you ready?
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Operational and financial restructuring and reorganisation
Operational and financial restructuring and reorganisation
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Recovery
Recovery
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Financial regulatory services
Financial regulatory services
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GDPR consultancy
The General Data Protection Regulations (GDPR) have transformed the way we handle personal data. This regulation is a game-changer for businesses operating within the EU, or the handling of EU citizens' data worldwide.
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Ship and aircraft registration
Ship and aircraft registration
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Medical cannabis licensing in Malta
A study published in 2018 by market intelligence and strategic consultancy firm Prohibition Partners, has forecasted that the European cannabis market will be valued €115.7 billion by 2028. According to the same study, while patient numbers are currently below 100,000 across the region, their number is set to grow to over 30 million in the next decade. In 2018 Malta introduced a bill to legalise the use of medical marijuana and attract companies willing to produce high-grade medical cannabis for the European market.
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Trust and trustee services
As an entrepreneur, business owner, parent or guardian, you will want to ensure that whatever happens in the future, the rewards from your hard work can be protected as efficiently as possible. Grant Thornton Fiduciaire Limited (Grant Thornton) understands this and provides a professional and holistic trust management service.
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Family trusts
The law establishes the requirement of a license for one to be able to act as a trustee subject to certain limited exceptions. One such exception is found in the Rules for Trustees of Family Trusts which provide for an exception to this rule where a trust is set up to hold property settled by a settlor or settlors for the present and future needs of family members or of family dependants who are clearly identifiable.
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Programmes
Grant Thornton is authorised and regulated by the Government of Malta to handle and submit applications for both citizenship applications as well as residence permits under the various residence programmes available in terms of Maltese law.
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Ordinary residency in Malta
Any EU, EEA or third country national who resides in Malta for more than 3 months is obliged to apply for a Residence Permit. There are various grounds upon which an applicant may apply to require a residence permit, including: Self-Sufficiency, Employment or Self-Employment, Family Members, Permanent Residence, Study Purposes.
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Qualifying Employment in Aviation Rule
Malta provides qualified persons employed in the field of aviation with an opportunity to enjoy a 15% flat personal tax rate on income generated from their direct employment in Malta. For a candidate to qualify, their annual income must exceed €45,000. This does not include the value of fringe benefits and applies to the derived income received from an eligible office.
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Qualifying Employment in Innovation and Creativity (Personal Tax) (Amendment) Rules, 2019
These Rules allows persons employed in a role directly engaged in carrying out, or management of research, development, design, analytical or innovation activities, to enjoy a 15% flat personal tax rate on income generated from their direct employment in Malta.
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Qualifying Employment in Maritime and Offshore Oil & Gas Industry Rule
Malta provides qualified persons employed in the field of aviation, with an opportunity to enjoy a 15% flat personal tax rate on income generated from their direct employment in Malta.
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Nomad Residence Permit
The NOMAD residence permit, which was launched in June 2021, allows third-country nationals who would normally require a Visa to travel to Malta, to retain their current employment based in another country whilst legally residing on the island.
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Direct international tax
Direct international tax
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Indirect international tax
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Global mobility services
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Transfer pricing
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Estate planning
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Wealth advisory
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Regulatory and legal
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Corporate services
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VAT
At its simplest, VAT is a tax on consumption and is a multi-stage tax (ie applied at every stage of the production process), which is applied to both goods (ie tangible property) and services. Additionally, although the tax is ultimately borne by the consumer (by getting included in the price paid), responsibility for charging, collecting and passing the tax on to the tax authorities, rests with the supplier.
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2018 Amendments of the Income Tax Act
The following is a brief overview of the new tax provisions introduced in 2018 by the Budget Implementation Act (Act VII of 2018) and other legislative enactments
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Mergers and acquisitions
Mergers and acquisitions
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ESEF Reporting
Our ESEF reporting service is tailored to assist listed companies in complying with the European Single Electronic Format (ESEF) requirements. As of 2020, ESEF is mandated for annual financial reports of issuers with securities listed on regulated markets. We provide services for mapping the taxonomy and generating audit/regulator-ready xHTML reports.
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EU funding
EU funding
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Prospects MTF
As of 2016, small and medium-sized enterprises in Malta can access the capital markets through Prospects - a market of the Malta Stock Exchange (MSE) designed specifically for Small and Medium sized Enterprises (SME). Prospects offers a cost-effective opportunity for entities looking to raise up to €5 million per issue.
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Project financing
Project financing
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Due diligence
Due diligence
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Valuations
Valuations
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Foreign direct investment
Foreign direct investment (FDI) is the category of international investment that echoes the objective of obtaining a lasting interest by an investor in one economy in an enterprise resident in another economy.
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Wholesale Securities Market
WSM is a joint venture between the Malta Stock Exchange and the Irish Stock Exchange, combining the best of each partner’s processes and technical skills.
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Investment Support
The government of Malta has made available several incentive programmes, aimed at supporting Maltese SMEs and start-ups. These support schemes are targeted at different stages of a company’s lifecycle and cover from the start-up to the consolidation and expansion phases. Such incentives are usually promoted and managed by Malta Enterprise, while Trade Malta focuses on supporting businesses to penetrate foreign markets.
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Aviation
The Maltese Government is constantly remaining to improve the position as the best place to do business within the aviation industry through exhaustive tax agreements, powerful legislation, and many aviation professionals. This is the best time for airlines, financiers and aircraft owners to be located in Malta.
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Maritime
For Maritime, Grant Thornton provide direction with regards to VAT guidelines for yacht leasing, as well as ship and aircraft registration.
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Automotive
We offer a broad range of services relating to automotive, ranging from Transaction advisory, access to finance, business advisory, process and inventory management, tax advisory, audit and advisory, outsourced support services.
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Blockchain technology
Blockchain technology
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The Malta Virtual Financial Assets Act
The Virtual Financial Assets Act provides a sound legislative framework for Malta to regulate and responsibly promote the use of cryptocurrencies, crypto-exchanges and other crypto-related services, through which Malta aims to promote further technological innovations and growth, and continue building on its robust financial services industry.
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Our role as a VFA agent
Our role as a VFA agent consists to assist, monitor and provide guidance throughout the full licensing process, and beyond the licensing stage. The VFA agent will be required to apply for the VFA license on behalf of the issuer.
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Initial Coin Offerings
Initial Coin Offerings (ICOs) in Malta have risen to prominence as a method to raise capital from the public, institutions or venture capitalists by selling a percentage of cryptocurrency to investors in the form of tokens in exchange for legal tender (smart contracts).
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Gaming Regulations
Malta recently overhauled the framework regulating the iGaming sector. Going forward operators will still be required to obtain authorisation to carry out regulated activities.
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Licensing Process
Prior to submission all applicants are advised to go through a pre-application process with one of the MGA’s Licensing Officers. This will ensure that the application has been correctly compiled and all the key ingredients are present.
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Malta Real Estate Investment Trust (REIT)
As part of the 2019 budget, the government has pledged to introduce a Real Estate Investment Trust (REIT) framework in Malta.
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The Markets in Financial Instruments Directive (MiFID) II
MiFID II aims to protect investors and make sure that financial markets operate in the fairest and most transparent way possible. Building on stock and investment trading regulation introduced in 2007 it sets to ensure a more integrated financial market.
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Taxation of Malta Collective Investment Schemes
Malta-registered collective investment schemes (CISs) are generally not subject to Malta tax. Given that CIS are properly structured, such schemes generally can take advantage of a number of tax benefits. When it comes to taxation of investors in collective investment schemes, this will depend on what type of income is being received, whether the investor is a Malta resident or not, and if the shareholder is an individual or a body-corporate?
Introduction
This regulation transposes paragraph 5 of Article 105a of the Council Directive 2006/112/EC as amended by Council Directive (EU) 2022/542 of 5 April 2022 and also amending Directives 2006/112/EC and (EU) 2020/285 with regards to these rates of VAT. In addition and from a local perspective, this new Legal Notice amended the Eighth Schedule to the VAT Act by introducing a new reduced VAT rate of 12% on certain services.
New Addition in the VAT Return
A revised VAT return template has been introduced, incorporating two additional fields - 31b and 37b. These fields are designated for transactions subject to the 12% VAT rate. This change not only affects businesses benefiting from the reduced rate but also others. A sample of the updated VAT Return Form including the 12% VAT rate can be found here. Proactive adoption of the updated VAT return would ensure timely compliance.
The New Reduced VAT Rate
As from 1 January 2024, the new reduced VAT rate of 12% applies to the following supplies of services:
Starting from January 1st, 2024, a reduced VAT rate of 12% applies to certain securities management services. Specifically, this rate applies to services involving the management of securities portfolios, commonly known as securities portfolio management services.
What Are Securities Portfolio Management Services?
Securities portfolio management services involve the continuous monitoring and management of a client's investment portfolio to make recommendations or decisions regarding investments. These services can be provided either on a discretionary basis, where the manager invests funds on behalf of the client, or on an advisory basis, where recommendations are provided to the client before any investments are made.
It is important to note that the reduced VAT rate of 12% applies only to securities portfolio management services and does not cover other types of investment advice or related services. Services such as advice on capital structure, corporate strategy, mergers and acquisitions, and other similar services are subject to the standard VAT rate of 18%.
Despite the introduction of the reduced VAT rate for securities management services, exemptions listed under Item 3 of Part 2 of the 5th Schedule to the VAT Act remain unaffected. This means that services such as receiving, executing, and transmitting orders to buy and sell securities, which are charged on a transaction-by-transaction basis, continue to be exempt from VAT, regardless of any management services included in the contractual arrangements.
Combined Fee Consideration - According to the Court of Justice of the European Union (CJEU), if a package of services which includes securities management, is charged based on a combined percentage fee of assets under management, such is treated as a single supply for VAT purposes. As such, the entire supply is subject to the reduced VAT rate of 12%.
Additionally, item 12 of the Eighth Schedule to the VAT Act introduces a reduced VAT rate of 12% for services encompassing the management of credit and credit guarantees. Effective from January 1st, 2024, this amendment applies to services provided by entities distinct from the original credit grantors. It is important to emphasize that this alteration does not impact the existing exemptions outlined under item 3 of Part Two of the Fifth Schedule to the VAT Act.
However, when managed by a taxable entity other than the original creditor, it becomes subject to the reduced VAT rate of 12%. To clarify, "credit and credit guarantees" encompass those whose supply would otherwise qualify for exemption under item 3 of Part Two of the Fifth Schedule to the VAT Act.
Services relating to the care of the human body delivered by professionals exercising any regulated health care profession regulated under the Health Care Professions Act (Cap. 464) are subject to a reduced rate of 12% applicable to services. This encompasses services rendered within health studio businesses or similar establishments. However, exempt (without credit) supplies outlined in item 11 of Part Two of the Fifth Schedule to the VAT Act do not fall in the scope of the newly introduced 12% rate.
Understanding VAT Exemptions for Medical Care
Items 11(1) and (2) of Part Two of the Fifth Schedule provide for exemptions for medical care services provided by professionals regulated under the Health Care Professions Act or the Psychology Act, both directly and through approved hospitals or institutions by the Minister. However, it is essential to note the limitations of these exemptions as they might not cover all services provided by healthcare professionals. Only services qualifying as "medical care" per the guidelines for VAT treatment of Health Care Services, issued by the CfTC (Commission for the Treasury of Customs), are eligible for these exemptions.
Implications and Scope of the 12% Reduced Rate
For services falling outside the scope of medical care or not covered by existing exemptions, the reduced VAT rate of 12% applies, provided they involve the care of the human body by a person in the exercise of any profession regulated under the Health Care Professions Act. However, services not meeting both the exemptions criteria and the criteria for the 12% reduced rate, are subject to the standard VAT rate of 18%.
Item 8 of Part Two of the Third Schedule to the VAT Act, stipulates that the supply of the continuous possession or use of a pleasure boat for not more than ninety (90) days is considered to be a short-term hiring of a means of transport, the place of supply of which, would be the place where that pleasure boat is actually put at the disposal of the customer.
On the other hand, the place of supply of the hiring of a pleasure boat, other than short-term hiring, would be the place where the customer is established, has his permanent address or usually resides.
Furthermore, the place of supply of the hiring of a pleasure boat to a non-taxable person, other than short-term hiring, would be the place where the pleasure boat is put at the disposal of the customer, in so far as such supply is actually provided by the supplier (i.e. the lessor of the pleasure boat) from their place of business or a fixed establishment situated in that place.
In light of the above, the 12% reduced VAT rate applies to pleasure boat rentals if the cumulative term, when added to any previous hiring within the past twelve (12) months, does not exceed a period of five (5) weeks, which is further stipulated as equivalent to thirty-five (35) days, over a running 12-month period. In cases where the rental surpasses this period, the reduced rate applies only to the initial segment with the remaining term subject to the standard 18% VAT rate. Responsibility lies with the lessor in accurately apportioning the taxable value based on the duration of the respective periods of hire.
As an exclusion, the provision of seating or space on board a pleasure boat, when provided separately from other passengers, does not qualify for the reduced VAT rate and should be charged at the standard rate.
The Commission for the Treasury of Customs (CfTC) issues guidelines shedding light on scenarios involving pleasure boat hire within packages of services. If the hire of a pleasure boat constitutes the principal component of a single composite supply, the reduced VAT rate applies to the entire package. However, services provided additionally and at the customer's request do not form part of this composite supply and should be subject to VAT at the standard rate.
Goods typically offered during pleasure boat hire, provided to the customer upon the boat's availability, may be considered part of a single composite supply. Conversely, items specifically requested by the customer are not automatically included in this composite supply and may be subject to standard VAT rates.
How we can help
At Grant Thornton Malta, our VAT team is equipped and ready to help you identify the VAT treatment of your supplies and provide assistance with the newly published guideline. For more information, please reach out to our team of experts. Trust Grant Thornton to be your partner - we allow you to focus on what you do best, while our dedicated team does the rest.
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