When it comes to opening an iGaming company in Malta, one has to be aware of the lengthy license application process, license types depending on the type of gaming desired and the tax and administrative fees required by the Malta Gaming Authority (MGA).
In this article, we will explain the tax treatment for iGaming Companies in Malta and highlight all the fees that need to be paid, depending on the type of gaming company being set up.
Tax Treatment for iGaming Companies in Malta
Just like any other regular limited liability company in Malta, an iGaming company has a number of tax obligations to abide by. In Malta, a 5% tax is applied to the revenue generated from the gaming activity, which is generated from players based in Malta. When it comes to new operators, the minimum compliance contribution does not apply for the first financial year.
Simultaneously, companies which are considered to be Start-Ups under the Directive on Start-Up Undertakings will be exempt from paying compliance fees, for the duration of 12 months.
Administrative Fees
Administrative expenses are costs incurred by an organisation, but are not directly related to a specific business function, such as providing the service itself. Instead, these fees are more tied to the organisation as a whole, rather than a specific department. In Malta, the iGaming companies setting up their operations are subject to a number of administrative fees, payable to the MGA. Such fees include;
- Application Fee for a New Licence of 5,000 Euro, which has to be paid when applying for the Gaming Licence.
- License Renewal application fee of 5,000 Euro. Similar to the above, this has to be paid upon application for renewal.
- A fee of 50 Euro, for obtaining a Key Function Certificate
- 1,500 Euro in order to transfer a qualifying interest in a license. This has to be paid upon requesting a transfer.
- For those exempt from obtaining a gaming license and would like to opt for a Material Supply Certificate, a fee of 1,000 Euro is requested, upon application.
- For those that already hold a license from the EU or any other recognised state by the MGA, but did not have their license granted in Malta, need to apply for a Recognition Notice. This has to be paid in advance, covering a full year. The fee is 5,000 Euro.
Licence and Compliance Fees
When a licence is issued by the MGA, the licensee is subject to pay a mandatory and non-refundable fixed annual fee, in order to hold the licence. Depending on the type of licence issued by the MGA, compliance contributions are also required.
B2C – Gaming Service Fixed Licence Fee – Per annum
This applies only for the Business to Customer type of licence. Depending on the type of gaming licence applied for, the licensee will be required to pay 25,000 Euro per annum, in order to keep the licence vacant and is non-refundable.
If the licensee applied for B2C license, specifically and solely, Type 4 Gaming Services, the licensee is mandated to pay a fee of 10,000 Euro per year.
B2B – Critical Gaming Supply Licence Fee – Per annum
This yearly fee applies to licensee applying to supply Type 4 Gaming Supplies. The applicant is subject to a 10,000 Euro license fee, to be paid every year.
Compliance Contribution
In 2018, the MGA issued a directive on how a licensee can calculate the compliance contribution. This was issued in accordance with the New Gaming Act, specifically chapter 583 of the Laws of Malta. This was used as an instrument to clearly identify how licensees are mandated to calculate and pay compliance contributions in pursuant to the Gaming Licence Fees Regulations.
B2C – Gaming Service Licence Compliance Contribution according to Game Type, for the Financial Year
B2C Type 1 – Minimum of 15,000 Euro and Maximum of 375,000 Euro
For every Euro earned of the first;
- 3,000,000 Euro, a licensee will be required to pay a rate of 1.25%.
For every Euro earned of the next;
- 4,500,000 Euro, a licensee will be required to pay a rate of 1.00%.
- 5,000,000 Euro, a licensee will be required to pay a rate of 0.85%.
- 7,500,000 Euro, a licensee will be required to pay a rate of 0.75%.
- 10,000,000 Euro, a licensee will be required to pay a rate of 0.55%.
- Any Euro after the mark 10,000,000 Euro, will be required to pay a rate of 0.40%.
B2C Type 2 – Minimum of 25,000 Euro and Maximum of 600,000 Euro
For every Euro earned of the first;
- 3,000,000 Euro, a licensee will be required to pay a rate of 4.00%.
For every Euro earned of the next;
- 4,500,000 Euro, a licensee will be required to pay a rate of 3.00%.
- 5,000,000 Euro, a licensee will be required to pay a rate of 2.00%.
- 7,500,000 Euro, a licensee will be required to pay a rate of 1.00%
- 10,000,000 Euro, a licensee will be required to pay a rate of 0.80%.
- 10,000,000 Euro, a licensee will be required to pay a rate of 0.60%.
- Any Euro after the mark 10,000,000 Euro, will be required to pay a rate of 0.40%.
B2C Type 3 – Minimum of 25,000 Euro and Maximum of 500,000 Euro
For every Euro earned of the first;
- 2,000,000 Euro, a licensee will be required to pay a rate of 4.00%.
For every Euro earned of the next;
- 3,000,000 Euro, a licensee will be required to pay a rate of 3.00%.
- 5,000,000 Euro, a licensee will be required to pay a rate of 2.00%.
- 5,000,000 Euro, a licensee will be required to pay a rate of 1.00%.
- 5,000,000 Euro, a licensee will be required to pay a rate of 0.80%.
- 10,000,000 Euro, a licensee will be required to pay a rate of 0.60%.
- Any Euro after the mark 10,000,000 Euro, will be required to pay a rate of 0.40%.
B2C Type 4 – Minimum of 5,000 Euro and Maximum of 500,000 Euro
For every Euro earned of the first;
- 2,000,000 Euro, a licensee will be required to pay a rate of 0.50%.
For every Euro earned of the next;
- 3,000,000 Euro, a licensee will be required to pay a rate of 0.75%.
- 5,000,000 Euro, a licensee will be required to pay a rate of 1.00%.
- 5,000,000 Euro, a licensee will be required to pay a rate of 1.25%.
- 5,000,000 Euro, a licensee will be required to pay a rate of 1.50%.
- 10,000,000 Euro, a licensee will be required to pay a rate of 1.75%.
- Any Euro after the mark 10,000,000 Euro, will be required to pay a rate of 2.00%.
B2B – Critical Gaming Supply Licence Compliance Contribution – Annual Licence Fees
The following are based on the annual revenue generated by the licensee;
B2B – Supply and Manage Material elements of the Game
If annual revenue generated;
- It does not surpass 5,000,000 Euro, the licensee is required to pay 25,000 Euro.
- Exceeds 5,000,00 Euro, but does not exceed 10,000,000 Euro, the licensee is required to pay 30,000 Euro.
- Exceeds 10,000,000 Euro, the licensee is required to pay 35,000 Euro.
B2B – Supply and Management of Software
If annual revenue generated;
- It does not surpass 1,000,000 Euro, the licensee is required to pay 3,000 Euro.
- Exceeds 1,000,00 Euro, the licensee is required to pay 5,000 Euro.
Other Fees
In the case of low-risk games, the operator is usually exempt from requiring a license. Instead of the fees mentioned above, the operator has to pay a one time and non-refundable fee for;
- Non-Profit Games, Commercial Communication Games and Limited Commercial Communication Games, are required to pay 25 Euro
Disclaimer Notice: All of the figures presented in this article are generated from the Malta Gaming Authority as of, April 2023.
