Do I need to pay taxes after getting a gaming permit in Malta?

A gambling license is required if you plan a gambling business in Malta. Malta is an attractive state for the gambling industry due to its loyal legislative framework and moderate taxation. Next, we will examine what taxes you need to pay after obtaining a Maltese gaming license. You should study this information in advance to avoid unpleasant surprises later.

Benefits of Malta Licensing

Maltese licensing for gambling provides several advantages, due to which many seek to open their gambling business in this jurisdiction:

  • there is access to the EU market and a large user audience;
  • licensed organizations have a high level of trust among the user audience;
  • preferential taxation with understated coefficients of corporate tax and VAT on the gambling business;
  • reliable infrastructure, developed telecommunications, and high-speed Internet;
  • highly skilled workforce.

All these significant advantages attract many investors to open a gambling business in Malta.

Maltese taxation

In this state, there is attractive taxation for the development of the gambling sector, which explains the incredible popularity of this jurisdiction. Two Maltese laws control the system of taxation:

  • Income Tax Law;
  • Law on Value Added Tax (VAT).

For organizations licensed by the MGA (Maltese Gaming Authority), the corporate tax percentage will be 35%. However, based on the Maltese gambling tax requirements, the organization will qualify for a 5% reduction in this rate. For an organization to reduce corporate tax, it must meet specific characteristics, such as being registered in Malta and having at least one of the directors be a Maltese resident.

In addition to corporate taxation, the gambling business has a VAT. Its standard rate is 18%, but there is a reduced taxation of 5% for the business.

Another attractive point in Maltese taxation is the participation in the EU VAT program. It means that gambling operators licensed in Malta are entitled to apply the pan-European VAT requirements: the VAT Reverse Scheme, which allows gambling operators, under certain conditions, to transfer the responsibility for paying VAT to their customers.

Moreover, the Maltese government has signed an agreement to eliminate the possibility of double taxation with more than 70 countries worldwide. It avoids double taxes on the profits of gambling owners.

Varieties of Maltese gambling permits

There are 4 types of licenses for gambling, namely:

  • Type 1 – games based on chance . Capital requirements start at €100,000, and the operator must be physically located in Malta.
  • Type 2 – sports betting games. Capital requirements start at €100,000, and the operator must be physically located in Malta.
  • Type 3 – peer-to-peer games (based on experience, e.g., poker). Capital requirements – from 40,000 euros and the operator may be located in another state (but the company must have a Maltese registration).
  • Type 4 – games with other resolutions. Capital requirements – from 40,000 euros and the operator may be located in another state (but the organization must have a Maltese registration).

Operators of all types of licenses must fully comply with the Regulatory Authority – MGA requirements.

Gambling Licensing Terms

Licensing requires fulfilling several conditions imposed by the MGA Regulator. It is done for the honesty and transparency of the gambling business, including to protect the interests of both gamblers and operators. Let’s consider these conditions.

Must be willing to run a gambling business – know how to run it, understand its risks, and follow regulatory rules and requirements.

Be prepared and have a strategic plan of action to achieve the firm’s objectives: marketing decisions, market research, and revenue prospects.

The company must operate exclusively within the framework of Maltese law and be able to comply with operational requirements: resolve legal issues with clients, maintain the necessary reporting of activities, as well as implement an AML (anti-money laundering) policy.

Confirm the readiness of the gaming platform by testing it in a simulated environment. Confirm the high-quality technical equipment and software reliability. Successful testing will ensure that the system functions smoothly and provides security and reliability to the user audience.

After fulfilling all the licensing conditions, your firm will become the owner of a gambling permit in one of the most attractive jurisdictions, and small taxation will significantly increase your income from the gambling business.

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