Starting a Taxi Business in Malta: Licence Requirements and Tax Obligations

Chloris Portelli
May 7
3 min read

Malta’s taxi industry plays a vital role in the country’s transport network, serving locals and tourists alike. If you are considering becoming a taxi driver or starting a taxi business in Malta, understanding the licensing requirements, VAT rules, and compliance obligations is essential. This guide breaks down the key points you need to know to navigate the process smoothly and operate legally.

Taxi Licence Requirements in Malta

To operate a taxi in Malta, you must obtain a taxi licence issued by Transport Malta, the government agency responsible for transport regulation. The licence ensures that drivers meet safety, legal, and service standards.

Eligibility Criteria

Age and Driving Experience: Applicants must be at least 21 years old and hold a valid Maltese driving licence for at least two years.
Medical Fitness: A medical certificate confirming physical and mental fitness to drive is required.
Criminal Record Check: Applicants must have a clean criminal record, particularly free from offences related to driving or public safety.
Knowledge Test: Drivers must pass a local knowledge test covering Maltese geography, traffic rules, and customer service standards.
Vehicle Requirements: The taxi vehicle must meet specific safety and environmental standards, including regular inspections.

Application Process

Submit Application: Complete the application form available from Transport Malta.
Provide Documentation: Include your driving licence, medical certificate, police conduct certificate, and proof of vehicle ownership or lease.
Pass Tests: Successfully complete the knowledge and vehicle inspection tests.
Pay Fees: Pay the applicable licence and registration fees.

Once approved, the taxi licence is valid for a fixed period and must be renewed regularly.

VAT Rules for Taxi Services in Malta

Understanding VAT (Value Added Tax) is crucial for taxi operators, especially those running their own business or employing drivers.

VAT Registration Threshold

Taxi operators must register for VAT under Article 10 if their annual turnover exceeds €35,000.
If turnover is estimated to be below this threshold, they can opt to register under Article 11 (exempt).

VAT Rates and Charges

Taxi services in Malta are subject to the standard VAT rate of 18% unless VAT exempt.
This VAT must be charged on fares and included in the price displayed to customers.
Operators must issue VAT-compliant receipts to passengers upon request.

VAT Reporting and Compliance

Registered taxi operators must submit periodic VAT returns to the Maltese VAT Department.
Keep detailed records of all fares, expenses, and VAT charged.
Failure to comply with VAT rules can lead to penalties and fines.

Practical Considerations for New Taxi Operators

Anyone planning to start a taxi business in Malta should take time to assess a number of important structural and compliance decisions before beginning operations. These include choosing the most appropriate business setup, whether as a sole trader or a limited company, and determining the correct VAT position—specifically whether registration under Article 10 is required or if Article 11 may apply.

It is also important to understand the ongoing administrative workload involved, particularly in relation to VAT reporting, invoicing, and other tax obligations. Proper bookkeeping is essential, with accurate records needed for all income and expenditure to ensure full compliance.

In addition, operators must ensure they meet all regulatory requirements set by Transport Malta, not only at operator level but also in relation to the drivers and vehicles involved in the business.

Common Challenges for Taxi Operators

Many new operators face challenges such as:

Understanding VAT obligations correctly
Keeping up with licensing renewals
Managing bookkeeping and tax reporting
Ensuring full regulatory compliance
Scaling operations legally

Professional support can help avoid costly mistakes and administrative issues. At MCP Accountancy, we can assist taxi operators with VAT compliance, bookkeeping, tax reporting, and ongoing regulatory obligations, ensuring your business remains fully compliant and efficiently managed.