Self-billing in Malta — when the buyer issues the invoice
What the Maltese VAT rules and EU law require before a customer issues invoices on behalf of a supplier.
Self-billing is the arrangement where the customer, not the supplier, issues the VAT invoice for a supply. The VAT Act allows it, following EU VAT Directive Article 224, provided there is a prior agreement between the parties and a procedure for the supplier to accept each invoice. Guidance for Malta says the invoice should carry the wording 'Self-billing'. It is common with marketplaces, agricultural buyers and commission arrangements. The supplier remains responsible for the VAT on its own sales.
- A prior agreement between supplier and customer must exist before the first self-billed invoice.
- Each invoice must go through an acceptance procedure agreed in that document.
- The invoice shows the wording 'Self-billing'.
- Both sides keep the agreement and the invoices for the retention period, currently six years.
How it works
Agree in writing: which supplies are covered, who issues the invoices, the numbering, and how the supplier accepts or disputes an invoice.
The customer issues the invoice with the supplier's details and VAT number as the supplier and applies the VAT treatment that applies to the supplier's sale.
The invoice is sent to the supplier under the agreed acceptance procedure. The agreement should state clearly what counts as acceptance.
Both parties record the invoice: the supplier as a sale, the customer as a purchase.
Corrections follow the same route: a credit note referencing the original invoice, issued under the same agreement.
Legal references
- VAT Act, Chapter 406 of the Laws of Malta — invoicing and self-billing conditions.
- Council Directive 2006/112/EC, Article 224 — invoices issued by the customer subject to prior agreement.
- Peppol BIS Billing 3.0 — invoice type code 389 for self-billed invoices.
Frequently asked questions
Does the supplier still declare the VAT?
Yes. The supplier is the person making the supply and reports the sale on its own VAT return, even when the customer prepared the invoice.
Can silence count as acceptance?
Only if your written agreement says so and sets a clear period. Do not assume silence works without that clause; check with an adviser.
What if there is no agreement?
The invoice may not be valid as a VAT document and the customer's deduction of input VAT could be challenged. Put the agreement in place before issuing self-billed invoices.
Does self-billing work across EU borders?
The EU Directive allows it with prior agreement. Each country's rules on invoice content still apply.
Can 4invoices manage self-billing agreements?
No. 4invoices does not manage agreements or acceptance procedures. It creates invoices with a VAT rate per line, works in any currency with an exchange rate and downloads a PDF. A 6-month trial is free without a card.