Source: https://rivet.global/blog/malta-companies-paying-remote-contractors
Published: 2026-09-25 · Updated: 2026-09-25 · By William Sunjo M.

# Maltese companies paying remote contractors abroad: VAT, status and records

Maltese tech and service companies often work with contractors across Europe and beyond. The reverse charge, employment status risk, records and paying in local currency.

## Key takeaways

- Services bought from contractors abroad usually fall under the reverse charge; the Maltese company accounts for the VAT.
- Contractors who work full time for one company, under its direction, can be treated as employees in their own country.
- Keep a contract, invoices, proof of payment and the exchange rate for each foreign payment.
- Paying contractors in their local currency on local rails delivers the invoiced amount.

A Valletta software company has 20 staff on the island and nine contractors elsewhere: in Sofia, Belgrade, Manila, Lagos and Lisbon. Malta's job market is tight, so contractors fill gaps in engineering and design. The finance manager pays them monthly, and every payment raises the same three questions.

## VAT: the reverse charge

When a Maltese company buys services from a contractor abroad, VAT usually shifts to it under the reverse charge. The contractor's invoice should carry no Maltese VAT. The company accounts for the VAT in its return and, if entitled to full recovery, deducts it in the same return. EU contractors show their VAT number where they have one.

## Status

Malta, like most countries, distinguishes self-employment from employment by the facts. A contractor who works full time for one company, follows its schedule and sits in its team looks like an employee. The contractor's own country may reach the same conclusion and expect social contributions.

Contracts that set deliverables, contractors who use their own equipment and set their own hours, and freedom to work for other clients are the usual safeguards.

## Records

For each payment keep:

1. The signed agreement.
2. The invoice, with the contractor's name, address, service, date and amount.
3. Proof of payment showing the amount, currency and rate used.

The Commissioner for Revenue can ask for all three to support the deduction.

## Currency

Contractors in Sofia and Lisbon receive euros by SEPA. Elsewhere:

- Serbia: dinars to a local account avoid conversion by the contractor's bank.
- Philippines: pesos to a bank account or e-wallet.
- Nigeria: naira to a local account, or dollars where the contractor prefers and local rules allow.

A euro SWIFT transfer forces the contractor's bank to convert, often with a receiving fee. Local currency on a local rail lands the invoiced amount.

## Paying into Malta: the local rail

| What | Detail |
|---|---|
| Local rail | SEPA Instant Credit Transfer |
| Run by | European Payments Council scheme, run by each bank |
| Settlement | Under ten seconds, 24/7 |
| Published fee | By the EU Instant Payments Regulation, no more than the bank charges for a standard SEPA transfer |

Source: [European Payments Council: SEPA Instant Credit Transfer](https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer). Checked when this guide was last updated; the scheme's own page has the current figures.

## Where Rivet fits

A Rivet business account pays contractors in 120+ countries, on local rails where available, from euro, dollar and other balances. Bulk payouts send the month's invoices together, each payment shows its rate before you confirm, and from the Growth plan a second approver can be required. Rivet is not a bank; regulated partner institutions hold the funds.

See also [how to pay international contractors](/blog/how-to-pay-international-contractors).

## Questions

### Does a Maltese company pay VAT on a foreign contractor's invoice?

Under the reverse charge, the Maltese company accounts for the VAT and, if fully entitled, deducts it in the same return. The contractor's invoice should not include Maltese VAT.

### Can a remote contractor be treated as an employee?

Yes, if the facts look like employment: fixed hours, integration into the team, one client and no own business. The contractor's country may apply its own tests.

### Should I pay contractors in euros?

In the euro area, yes, by SEPA. Elsewhere, local currency usually leaves the contractor with more, because their bank does not convert and charge.

### What if a contractor changes bank details?

Confirm the change by video call or phone with the contractor, never by email alone, and require a second approval for the first payment to the new account.