Authors: Amanda Abela, Senior Tax Accountant and Letizia Seychell, Senior Tax Accountant
Date: 9th February 2021
In December 2020, Directive 2006/112/EC was amended to reflect the exceptional circumstances caused by the COVID-19 pandemic, with the aim of ensuring a more affordable supply of COVID-19 vaccines and in vitro diagnostic medical devices as well as of services closely linked to such vaccines and devices. These amendments will be in force until 31st December 2022 or until the exceptional circumstances caused by the COVID-19 pandemic cease to exist.
As a result, in January 2021, the Malta VAT Act was amended by Legal Notices 4 and 5 of 2021.
LN 4 of 2021 – VAT exemption for services closely linked to COVID-19 vaccines
The Fifth Schedule Part 1 of the VAT Act has been amended so that “services closely linked to COVID-19 vaccines falling under sub-heading 3002.20 of the Customs Tariff contained in the First Schedule to the Import Duties Act” are exempt with credit.
LN 5 of 2021 – Reduced VAT rates for COVID-19 in vitro diagnostic devices
The Eighth Schedule of the VAT Act has been amended so that:
• goods falling under sub-headings 9027.80.80 and 3821.00 where they consist of COVID-19 in vitro diagnostic medical devices; and
• services closely linked to goods under sub-headings 3822; 3002.15; 9027.80.80 and 3821.00 where the goods under these sub-headings consist of COVID-19 in vitro diagnostic devices are subject to a reduced VAT rate of 5%.