Reverse VAT in Malta: find the net price from a gross price
Why you cannot just subtract 18% from a gross price in Malta, and the correct formula for extracting VAT.
Key facts
| Place | Malta |
|---|---|
| Tax | VAT |
| Standard rate on file | 18% |
| Multiply net price by | 1.18 |
| Tax share of a gross price | 15.25% |
| Currency | EUR |
Why subtracting 18% gives the wrong answer
The tax was calculated on the net price, not on the gross price. Taking 18% off the gross price removes too much. The correct approach is to divide the gross price by 1.18, which returns the net price exactly.
Worked example
Here is the calculation with sample figures. Change any number in the Malta Reverse VAT Calculator to run your own.
| Gross amount | €360.00 |
| Tax rate (%) | 18% |
| Net amount | €305.08 |
|---|---|
| Tax | €54.92 |
The tax fraction
If you only need the tax portion, multiply the gross price by 0.1525. That fraction, the rate divided by 100 plus the rate, is sometimes called the tax fraction, and it is useful when you reconcile receipts that only show tax-inclusive totals.
Where this comes up
Expense claims, receipts from shops in Malta, marketplace payouts and quotes given "all in" all need the tax extracted before you can record the net cost correctly in your books.
Quick reference at 18%
Common amounts in Malta, worked both ways: adding tax to a net price, and extracting it from a price that already includes tax.
| Amount | Tax on net amount | Gross (net + tax) | Net if amount includes tax |
|---|---|---|---|
| €10.00 | €1.80 | €11.80 | €8.47 |
| €50.00 | €9.00 | €59.00 | €42.37 |
| €100.00 | €18.00 | €118.00 | €84.75 |
| €250.00 | €45.00 | €295.00 | €211.86 |
| €500.00 | €90.00 | €590.00 | €423.73 |
| €1,000.00 | €180.00 | €1,180.00 | €847.46 |
| €5,000.00 | €900.00 | €5,900.00 | €4,237.29 |
How Malta compares
Standard rates on file for other countries. A difference of a few points matters most on high-value purchases and on cross-border sales.
| Place | Rate on file | Compared with 18% |
|---|---|---|
| Lebanon | 11% | lower |
| Lithuania | 21% | higher |
| Luxembourg | 17% | lower |
| Mexico | 16% | lower |
| Morocco | 20% | higher |
| Nepal | 13% | lower |
Using the calculator step by step
- Open the Malta Reverse VAT Calculator.
- Type your figures into the numbered lines. Results update as you type.
- Check the rate field. It starts at 18%; change it if a reduced rate, local surcharge or exemption applies to you.
- Read the result on the receipt panel, and use the formula shown under it if you need to explain the figure to a client or colleague.
Key terms
- Reduced rate
- A lower rate that applies to specific categories, often essentials such as food, medicine or books.
- Deduction
- An amount subtracted from taxable income. It saves tax equal to the deduction times your marginal rate.
- Gross amount
- The amount after tax is added, which is usually what a consumer pays.
- Marginal rate
- The rate applied to the next unit of income. It decides how much of a raise or a deduction you keep.
- Taxable income
- Income left after allowances and deductions, on which the tax rates are applied.
Common mistakes to avoid
- Subtracting 18% from the gross price instead of dividing by 1.18.
- Reclaiming tax on receipts that do not show a valid tax breakdown.
- Recording gross amounts as costs and then reclaiming the tax a second time.
Run your own numbers. The Malta Reverse VAT Calculator updates as you type and shows the formula it uses.
Frequently asked questions
How do I remove VAT from a price in Malta?
Divide the gross price by 1.18. The difference between the gross and net price is the VAT.
What is the VAT fraction at 18%?
It is 0.1525 of the gross price.
This article is general information for planning, not tax advice. Rates and rules change; confirm with your tax authority or a qualified adviser.