Malta’s Digital VAT Reform: E-Invoicing Rollout Expected Soon

November 9, 2025

Featured Partners

The Malta Tax and Customs Administration (MTCA) published the Pre-Budget Consultation Document 2026 (Pre-Budget Document), announcing its intention to accelerate the introduction of mandatory e-invoicing and real-time reporting, commonly referred to as DRR.

The Pre-Budget Document also reflects on international standards and solutions as means to create a simpler, more efficient tax system, aligned with the OECD’s 15% Global Minimum Tax and the EU AT in the Digital Age (ViDA) initiative.

Key Takeaways from the 2026 Pre-Budget

In the Pre-Budget Document, the MTCA underlined that the main driver of the ongoing international tax reform is the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, which has introduced a two-pillar plan to modernize global taxation. It is also highlighted that Malta is closely monitoring these developments while maintaining dialogue with the European Commission to ensure that its future tax measures remain compatible with EU law and continue to support foreign direct investment.

Additionally, Malta is also committed to aligning with the changes at the EU level in the area of VAT through the ViDA initiative. As stated, the reform seeks to modernize VAT administration to suit the digital economy. The key mechanisms to achieving this goal include introducing real-time digital reporting and e-invoicing to combat fraud, estimated at around EUR 60 billion annually, expanding the OSS to simplify cross-border VAT compliance, and imposing new obligations on digital platforms to collect VAT on short-term accommodation and transport.

Even though the Pre-Budget Document does not include official implementation dates, the rollout is expected to follow a phased approach, coordinating with the EU’s 2030 e-invoicing and digital reporting requirements under ViDA. Notably, at this time, there are no mandatory e-invoicing rules for B2C, B2B, or B2G in Malta.

Conclusion

Given that Malta has one of the highest VAT gaps in the EU, at 24.2% in 2023, more than double the EU average of 9.5%, and that only Romania has a higher VAT gap in 2023, with a 30% compliance gap, it is not surprising that MTCA is eager to implement mechanisms to help reduce the gap. Therefore, it is expected that Malta will soon announce the timeline for the implementation of mandatory e-invoicing.

Source: Malta Pre-Budget Consultation Document 2026, European Commission

What did Malta announce in its 2026 Pre-Budget Consultation Document?

Malta’s 2026 Pre-Budget Document announced plans to accelerate the introduction of mandatory e-invoicing and real-time reporting to modernize its tax system and align with international standards.

Why is Malta introducing mandatory e-invoicing and real-time reporting?

The initiative aims to reduce Malta’s high VAT gap, improve compliance, and align the country’s system with the EU’s VAT in the Digital Age (ViDA) initiative and OECD’s global tax reforms.

How will Malta’s e-invoicing reform align with EU ViDA requirements?

Malta’s reform will follow the EU’s 2030 e-invoicing and digital reporting framework under ViDA, which promotes real-time digital reporting and fraud prevention across the Union.

Are there mandatory e-invoicing requirements in Malta now?

Currently, Malta has no mandatory e-invoicing obligations for B2B, B2C, or B2G transactions, but this is expected to change once the implementation timeline is announced.

What is Malta’s VAT gap and why is it significant?

Malta’s VAT gap was 24.2% in 2023, more than double the EU average. This gap signals significant compliance issues, motivating reforms to strengthen revenue collection.

When will Malta implement mandatory e-invoicing?

While no official dates were included in the 2026 Pre-Budget Document, the rollout is expected to occur in phases, coordinating with the EU’s 2030 ViDA timeline.

VAT