The service the operator is licensed for, and the

The draft law introduces new financial obligations in
relation to the payment of taxes and licence fees. The proposed legislation
introduces the concept of a two-tier licence fee for gaming operators in
possession of a full ten-year licence, where they will be bound to pay a
singular fee composed of fixed and variable components – the fixed component is
to amount to €25,000, and will be due in advance every 12 months. On the other
hand, the variable component is to be paid on a monthly basis – before the
expiration of the 20th day of the month, commencing after the month in which
the licence period commences – and such payable amount is determined according to
the type of gaming service the operator is licensed for, and the revenue
generated.1
Furthermore, those providing critical supplies to businesses, will also be obliged
to pay a licence fee depending on the type of service they render – game providers
are duty-bound to pay an amount varying between €25,000 to €35,000 depending on
the total income generated. On the other hand, those rendering back-end services
and providing certain components and tools to facilitate certain server-side
functions such as the gathering and processing of data, are subject to a yearly
fee ranging between €3,000 and €5,000. With regards to taxation, the MGA wants
to introduce a completely new structure, so as to provide a more reasonable and
efficient process. As proposed in the draft legislation, B2B operators, whether
remote or land-based, will no longer be required to pay tax. The rationale behind
such a decision involved the principle of double taxation – the MGA reasoned
out that since the B2B operators had a portion allocated to them from the total
revenue generated by the B2C operators, to whom which they provided supplies
and services, it made no sense for B2B operators to pay tax on earned income
which would have already been subject to tax, thus eliminating double taxation.2
As the present situation stands, B2C operators based in Malta which operate in
other foreign countries are subject to pay both the gaming tax, as established
under Maltese law, and any tax imposed by other jurisdictions, where such
operations are being held. In view of this issue, the MGA is proposing a point
of consumption tax so that these B2C gaming operators will benefit from a
reduction in tax – as officially stated in the White Paper: “… unless otherwise exempt, all operators of
licensable gaming services should pay gaming tax amounting to five percent (5%)
of the gaming revenue derived from end customers located in Malta, whether the
customer is playing from a land-based casino, a gaming parlour, a bingo hall,
or via the internet.”3

1 Benjamin Reedman, ‘Practical
Guide: Significant Changes Introduced by the Malta White Paper on Reforms to
the Gaming Legal Framework’ (21 November 2017)
accessed 27 December 2017

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2 Dr. James Scicluna, Tiffany Farrugia, ‘Malta’s proposed gaming law overhaul: Key changes and challenges’ (8
August 2017)
accessed 27 December 2017

3 MGA, ‘A White Paper to Future Proof Malta’s Gaming
Legal Framework’ (July 2017) 25