Introducing the second reading of a Bill amending the VAT Act, Prof. Scicluna said new VAT rules specifically affecting the gaming industry would be introduced on January 1.

The rules would cover services provided electronically to non-business customers. VAT would be charged in the country where the consumer was based if the service of online gaming was considered vatable there.

Maltese operators providing such a service to other EU member states would be subject to VAT in that country.

As the law stood, such operators were not able to offset their input VAT because many countries were exempt. The changes being made would mitigate the situation and Maltese operators would be on a level footing with operators in other states.

Mr Fenech pointed out that the change, which was not being made out of choice, was causing unnecessary bureaucracy and instability. However, the sector was being directly affected by a directive because of certain problems the European Commission had not yet resolved. There was lack of convergence on a European level about how online gambling should be treated throughout the EU. There were certain countries that did not even recognize it because they considered it immoral in principle, so they could not even discuss the issue with Malta.

However, Mr Fenech added, the European Commission was obliged to provide clarity for all member states on how to deal with the industry. Malta could not comply with obligations which, in some cases, did not exist.

He said the other member State involved should recognise the laws governing VAT and iGaming in Malta and stressed that a better explanation to operators and professionals was required because the island was risking that some service providers would solve the problem by moving out of Malta.

He encouraged the Gaming Authority, the VAT Department and Parliamentary Secretary Josè Herrera, with whom the Opposition had met, to be proactive on this issue, without losing any advantages for those who had invested in this sector over the last 10 years

Prof. Scicluna said that while it was important to be transparent, certain regulations should not interfere with Malta’s competitiveness. The best expertise was being used to ensure that the industry would be safeguarded.

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