Self-billing in Malta — when the buyer can issue the supplier's invoice
The CFR-approved framework for self-billing in B2B supply chains, what the agreement must say, and how to encode self-billed invoices for Peppol.
Self-billing (also called 'customer-issued invoicing' or 'recipient-created tax invoice') is the arrangement where the customer, not the supplier, issues the VAT invoice for a B2B supply. Malta permits it under art. 50(8) of the VAT Act provided there is a prior written agreement between the parties and the supplier accepts each self-billed invoice. The mechanism is common in agriculture (where buyers compile invoices for many small suppliers), in marketplace platforms (where the platform invoices on behalf of the seller), and in commission-based industries (where the principal calculates commissions and invoices the agent's services). CFR Notice 84/2017 sets out the documentation framework and the mandatory wording.
- Prior written agreement: both parties sign before any self-billed invoice is issued, kept for 6 years.
- Mandatory wording: 'Self-billing' must appear on the invoice (or 'Fattura ta' awto-fatturazzjoni' in Maltese).
- Supplier acceptance: each self-billed invoice must be accepted by the supplier — silence for 15 days = deemed acceptance per the agreement template.
- Sequential numbering: customer maintains the supplier's sequential numbering and the supplier's VAT number on the invoice.
How it works
You (the customer) and the supplier sign a written self-billing agreement before any invoice is issued. The agreement covers: the scope of supplies (which products/services), the duration (typically 12 months renewable), the supplier's commitment to accept the invoices, the customer's commitment to issue compliant invoices, and the procedure for objection. Both parties retain the agreement for 6 years.
You issue the invoice on behalf of the supplier. The invoice carries the supplier's name, VAT number and address as the supplier (not yours), but you generate the document and your systems control the numbering sequence assigned for the supplier. You apply the supplier's actual VAT treatment (e.g. 18% on standard supplies, 0% on intra-EU, AE on reverse charge), not your own.
You send the invoice to the supplier with a request for acceptance. The supplier can accept explicitly (signed return, email confirmation) or via the 'deemed acceptance' clause: if no objection within 15 days, the invoice is accepted by silence. The supplier's acceptance closes the loop — the invoice is then a valid VAT invoice for both sides.
Both sides record the invoice in their VAT books: the supplier as output (sale), you as input (purchase). The supplier remains the legal taxpayer for the output VAT, and your input VAT recovery follows the normal rules. If a dispute arises (supplier rejects the amount or the VAT treatment), the disputed invoice is cancelled with a credit note and re-issued.
For Peppol BIS 3.0, self-billed invoices use the same XML format but the cbc:InvoiceTypeCode is 389 (Self-billed invoice) instead of 380 (Commercial invoice). The cac:AccountingSupplierParty and cac:AccountingCustomerParty roles are correct (supplier is the seller, customer is the buyer) — the InvoiceTypeCode is the only differentiator at the structured level.
Legal references
- VAT Act, Chapter 406, art. 50(8) — permission for customer-issued invoicing.
- CFR Malta Notice 84/2017 — self-billing framework and mandatory wording.
- Council Directive 2006/112/EC, art. 224 — EU permission for self-billing with prior agreement.
Frequently asked questions
Does the supplier still need to keep their own VAT records?
Yes — the supplier remains the legal taxpayer for the output VAT and must include the self-billed sale in their own VAT return. They keep the acceptance evidence (either explicit signature/email or proof of deemed acceptance after 15 days), the contract, and a copy of each invoice. CFR audits the supplier on the same standard as if they had issued the invoice themselves.
Can I use deemed acceptance via silence for every self-billed invoice?
Yes, provided the prior agreement explicitly includes the deemed-acceptance clause and the 15-day window is clearly communicated. Without that clause in the agreement, deemed acceptance is not legally effective and the invoice remains in a pending-acceptance state. CFR Notice 84/2017 provides a template clause that most parties adopt verbatim.
What happens if I issue a self-billed invoice without an agreement in place?
The invoice is invalid as a VAT document. The supplier doesn't have a duty to recognise the output VAT (because they didn't authorise the invoice), and you cannot claim input VAT recovery on it. CFR can issue an additional assessment to deny your input VAT claim. You correct the situation by signing the agreement retroactively (CFR accepts retrospective agreements for genuine bona-fide errors) and re-issuing each invoice with the supplier's explicit acceptance.
Does self-billing work for cross-border EU supplies?
Yes — art. 224 of Directive 2006/112/EC explicitly permits self-billing across the EU. The buyer in member state A can issue a self-billed invoice on behalf of the supplier in member state B, provided the prior agreement exists. The supplier in member state B records the output VAT (or applies reverse charge if the buyer is in another member state — common because the buyer who is self-billing typically already has B2B status). Each member state's local rules on form and content apply to the supplier's records.
How are credit notes and corrections handled?
The customer issues the credit note on the same basis as the original invoice — same self-billed format, same prior agreement, same acceptance procedure. The credit note must reference the original invoice number and the reason for the correction. Both parties record the correction in their VAT books for the period in which the credit note is issued (not the period of the original invoice), per art. 90 of Directive 2006/112/EC.