Are you being served your fiscal receipt?

Inspections find 249 cases of restaurants, kiosks and cafeterias in breach of VAT rules

Restaurants are obliged to issue a fiscal receipt irrespective of whether the customer wants it or not
Restaurants are obliged to issue a fiscal receipt irrespective of whether the customer wants it or not

The story has become all too common with diners being given an itemised bill by the restaurant, which resembles a fiscal receipt. 

The chit handed over by the waiter looks like a receipt, but it is not, and unsuspecting customers can easily be misled. 

If they leave the restaurant without the fiscal receipt, customers would be helping the establishment’s owner pocket the VAT charged rather than passing it on to government. 

The practice to issue an itemised bill, or a pre-bill, is not illegal but the Tax Commissioner told MaltaToday it is obligatory for a fiscal receipt to be issued without the need for the customer to ask for it. 

“Restaurant operators are obliged to issue a fiscal receipt for every sale to their customers upon payment. If an Itemised bill/pre-bill is issued and a fiscal receipt is not, then this would be against the law,” the Tax Commissioner said. 

In a recent complaint on Facebook, Labour MEP Cyrus Engerer said he was increasingly being asked at restaurants whether he wanted the fiscal receipt despite this being an obligation

But Engerer’s story is not unique with many other diners not being given a fiscal receipt unless they specifically ask for one. This is clearly illegal. 

The VAT Act states that businesses are to issue a fiscal receipt for the amount paid and do so “immediately after payment” is done. 

“Restaurant operators are not an exception to this,” the Tax Commissioner said, adding the obligation to issue a receipt remains even when customers state they do not want one. 

He insisted that asking a client whether they want a fiscal receipt is futile. “Failure to issue a fiscal receipt is a criminal offence and the defaulting restaurant operators may be fined between €700 and €3,500 by the Criminal Courts if they plead guilty or are found guilty,” he said. 

Restaurants more often than not use computerised systems instead of traditional cash registers in their operations. Nonetheless, the conditions set out by the tax authorities when authorising such computerised systems state that when an itemised bill or pre-bill is issued this must clearly show it is not a fiscal receipt. In this way, the client would know that a fiscal receipt is still to be provided upon payment. 

Whether this happens is a different matter altogether but the tax authorities do carry out regular enforcement action, including spot-checks to ensure compliance with the rules. 

According to the Malta Tax and Customs Administration between January and October of this year 1,233 inspections were carried out on restaurants, kiosks, cafeterias and other food services activities. 

From these 249 were reported as not conforming with VAT law. The Tax Commissioner said that infringements included not issuing fiscal receipts or issuing incorrect receipts, such as charging the wrong VAT rate and amounts on the receipt not corresponding to what was actually paid by customer; issuance of receipts from unapproved computerised systems; and operating with an inactive VAT number or not registered for VAT. 

“Such cases are then either issued with a compromise fine ranging from €50 to €200, or taken to the Criminal Court where, upon conviction, they become liable to fines between €700 and €3,500,” the Tax Commissioner said. 

He added that as part of the ongoing educational campaign to increase fiscal compliance, the tax authorities’ will in the near future include the topic of fiscal receipts. “We intend to educate both the public with regards to their rights and business operators with regards to their obligations.”