As you may be aware, it is a principle of Value Added Tax that VAT is chargeable on the supply of a service when certain conditions are met, one of which is when the supply is made by a “Taxable Person” acting as such. In terms of Article 5 of the Malta VAT Act, a Taxable Person is any person carrying on an economic activity, which by definition excludes the activities of holders of an office. As a result, the activities of the holder of an office, which includes an individual appointed to the post of, for example, Director or Company Secretary of a limited liability company, in principle fall outside the scope of VAT.

However, pursuant to the judgement of the CJEU in the case C-94/19 – San Domenico Vetraria SpA v Agenzia delle Entrate – the afore-mentioned interpretation shall no longer apply. Thus, where a Company is being remunerated for making available to another Company the services of a holder of an office (e.g. an Individual Director or Company Secretary), would in fact constitute an economic activity, which falls within the scope of VAT.

In view of these recent developments, the way your Company is invoiced for any of the above services going forward will change and VAT will be charged at the applicable rate on such services. If you wish to discuss any potential consequences of the CJEU’s judgement for your business, please do not hesitate to contact us on