CESOP update – local transposition of the new EU VAT reporting obligations for PSPs

On 24 November 2023, the Minister for Finance published Legal Notice 272 of 2023 Value Added Tax (Reporting Obligations for Payment Service Providers) Regulations, which transposes the EU CESOP Directive (Directive (EU) 2020/284) introducing reporting requirements for payment service providers (PSPs) through the EU-wide Central Electronic System Of Payment information (CESOP) into Maltese VAT legislation.

With effect from 1 January 2024, PSPs as defined in terms of the Financial Institutions Act or PSD II (Directive (EU) 2015/2366), whose home or host Member State is Malta (i.e. including foreign PSPs passporting into Malta), and which provide payment services falling within the scope of the CESOP Regulations, are required to:

• Notify the Commissioner for Tax and Customs (CfTC) by registering as a PSP for the purposes of the CESOP Regulations by not later than 25 days from the date of their entry into force, or the date when Malta becomes its home Member State or host Member State as applicable, whichever is the later. The CESOP registration shall be submitted electronically directly through the designated Malta CESOP portal which should shortly be made available by the CfTC; and
• Keep detailed information as set out in the CESOP Regulations, for each calendar quarter, on payees and on payments in relation to qualifying payment services they provide in Malta.

Failure by a qualifying PSP to submit the information required within the prescribed time limits shall give rise to the imposition of administrative penalties. In addition, in the event of a failure to adhere to any of the requirements laid down by the Regulations, or where the information submitted is found to be misleading, deceitful or false, criminal offence penalties shall, upon conviction, apply to every senior managing official of the defaulting PSP. The fine shall be of not less than €10,000 and not more than €30,000 for each offence.

Considering the fast-approaching effective date of CESOP and the expected significant volumes of reportable data, it is important to ensure that qualifying PSPs are ready to be CESOP compliant without delay. To discuss the applicability and implications of CESOP on your business, and Deloitte’s available CESOP reporting solutions, please do not hesitate to contact us.