Malta VAT Rules for Taxi Operators Using Ride-Hailing Platforms

On January 25, 2026, Malta's Tax and Customs Administration released explanatory notes on VAT treatment of taxi operators using online ride-hailing platforms. More specifically, the notes focus on how VAT should be accounted for on passenger fares and on the service fees and commissions charged by digital platforms, clarifying who is responsible for charging, self-charging, and reporting VAT, depending on the operator’s VAT status.

VAT Implications on Taxi Operators

The explanatory notes clarify that when an online platform or website facilitates taxi services, the responsibility for charging VAT remains with the taxi operator. However, a key criterion for this rule to apply is that the platform acts in the operator's name and on the operator's behalf when accepting bookings. In these cases, it is up to the taxi operator to account for VAT on the full amount paid by the customer, including any commission retained by the platform.

The commission paid to the platform is treated as a payment by the taxi operator for the platform's facilitation services. Notably, if the place of supply of the facilitated services is Malta and the platform is not registered there for VAT purposes, the taxi operator must apply the reverse charge mechanism and self-account for VAT at the 18% standard rate on the platform’s commission.

With these explanatory notes, the Tax Administration also clarifies when and how taxi operators may recover input VAT on vehicle-related costs, how VAT should be treated when taxis are used partly for private purposes, and what VAT consequences arise when a taxi is sold or when a business registration is cancelled. Additionally, the notes include several valuable examples of real-life situations to help in-scope businesses understand how the rules apply.

Conclusion

It is important to note that the explanatory note is explicitly described as non-binding and a work in progress, meaning it does not constitute a formal or definitive legal position of the Tax Administration. Instead, it is intended as practical guidance that will be updated over time as business models and practices in the taxi and ride-hailing sector continue to evolve. Therefore, in addition to understanding how rules currently apply, taxable persons operating in this sector should monitor for further guidance and potential changes in interpretation.

Source: Malta Tax and Customs Administration