VAT for Artists
Disclaimer
Allura does not claim to be qualified to provide legal, tax or financial advice. We can give no assurances as to the accuracy or adequacy of the information we provide and we cannot be held accountable for decisions made based upon it. For accurate, comprehensive and tailored information you should consult an accountant for professional advice.
The information provided below is intended to make you aware of what might be involved in joining Allura Art. We can only point you in the right direction and you should do your own research so you make an informed decision as to whether or not to come on board.
That being said, this information represents our best understanding of the current rules and procedures as of November 2020. Please also be aware that regulations are subject to periodic changes in the law.
Why you need a VAT number
Allura artists should be aware of the legalities of selling work when it comes to VAT. In short, if you plan to sell work, you’ll need a VAT number. This is a legal requirement and enables you to give your customers fiscal receipts (these are explained further down).
Getting a VAT number
If you don’t have a VAT number, don’t panic. You can easily register online to get a VAT number here. It can take up to five working days to be processed.
When registering for VAT, this can be done under one of two different regimes:
The full refund system
Or
2. The exempt system (Article 11)
Allura typically works with artists who are exempt for VAT purposes and registered under Article 11. This means that you do not charge your customers VAT on artwork they purchase from you.
Please refer to the government guidelines and seek professional advice.
If you have questions when applying for your VAT number you can call VAT customer support on 153 or contact your accountant.
Fiscal receipt books
Before you and your artwork can be published live on the Allura Art website, you’ll need to have a fiscal receipt book.
You can request a fiscal receipt book as soon as you are issued with a VAT number. If you do not already have a fiscal receipt book you can order one online by clicking here. It can take about a week, so please order it as soon as you are confirmed as an Allura artist. Please let us know when you have it in hand so we can go ahead and publish you and your work on the website.
Registering as self-employed
As an artist producing and selling work, you will need to register your part-tme activity with Jobsplus. Your part-time activity is referred to as self-employment. A person can be self-employed on either a full-time or part-time basis, so an artist with an existing full-time job would register as a part-time self-employed person.
You will need to complete the Jobsplus engagement form: Declaration of Commencement of Employment - Self-Employed Persons
If your activity is part-time and you are employed full-time elsewhere, you can apply for a special tax rate of 15% on your part-time income. In order to do this the part time activity must be registered with Jobsplus. Click here for details.
What if I am not already employed?
If your self-employment activity is going to be your only income then you will need to be aware of your responsibilities in terms of national insurance.
Employed persons have a national insurance (NI) number (also called a social security number) and pay NI contributions through their primary employment. Therefore, if you are not already employed, you may not be paying NI.
A person who is self-employed arranges their own social security. By registering as self-employed you will be responsible for paying your own regular NI contributions. If you do not have a social security number, for whatever reason, you will need to apply for one before you can register as self-employed.
For information on applying for a social security number, click here.
Income tax
When you are paid a salary, your employer deducts the income tax from your wages before you are paid.
However, if you are self-employed you should declare your income annually by preparing a profit and loss account for the year.
If you are employed full-time AND registered as part-time self-employed, you can qualify for 15% on your part-time self-employment. Click here for details and remember to declare your income annually (April for the preceeding year) using the TA22 form.
VAT thresholds
For a VAT exempt artist, the VAT threshold is the value of sales you can accumulate per year before you are no longer eligible for VAT exemption under Article 11. Currently the VAT threshold in Malta is set at €35,000 per annum. However, to be sure, once you have your VAT number, you should check your VAT threshold with an accountant.
Distance sales thresholds
Distance sales is a term used to refer to sales outside of Malta but within the European Union (EU). As of July 2021 a distance sales threshold (maximum limit) of €10,000 per annum will apply to your total sales throughout Europe. When this threshold is exceeded, VAT would then be applicable in the buyer’s country. In order for it to be applied, you would need to register with the One Stop Shop (OSS) scheme. Artists under Article 11 (exempt) will also need to register for OSS under Article 12.
To remain VAT exempt your total sales must remain under the VAT threshold (for goods in Malta this is €35,000). Distance sales (maximum €10,000) count towards the €35,000 VAT threshold for your total sales.
Sales outside of the EU are not subject to VAT and therefore no thresholds apply.