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Malta company formation package: 99 EURO – arrangement of Malta company formation and bank account (via officially licensed local member / partner firms) including VAT and Tax registration. "FBS KOTSOMITIS", operating since 1998, is a well-known and established international professional services network with officially licensed and regulated local member / partner firms. Contact us to start process by sending an email to, by using our contact form or by calling on +356 2338 1500.

Shared Conduct Agreement

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Malta Remote Gaming Company Shared Conduct Agreement

Gaming operators are increasingly finding it more beneficial to enter into a remote gaming shared conduct of business agreement with other parties to provide ancillary services to gaming.  The parties undertake to conduct their business together by becoming responsible for specific activities in the provision of gaming services.  This shared conduct agreement which takes the form of a contractual joint venture, may be of particular benefit to the licensed remote gaming company, not only because it allows for a more specialised approach in the presentation of a well-refined gaming product, but also because of the positive Value Added Tax (VAT) implications on the provision of certain key services such as marketing and advertising.

Currently, only gaming services covered by Item 9 of Part Two of the Fifth Schedule of the VAT Act are exempt from VAT; “Government lotto and lotteries, the supply of agency services related thereto, and such other supplies related to gambling as may be approved by the Minister“.

There is no definition of what “supplies” fall under the aforesaid exemption.  This has normally been interpreted restrictively to supplies which are intrinsic to the gaming transactions.  The Lotteries and Gaming Authority Malta (“LGA”) has issued an indicative list of services, which may be deemed to constitute supplies intrinsic to the gaming transaction, and which thereby would, be exempt from VAT.

However, any service which is received by a Maltese gaming company, which is outside the scope of the aforesaid Item 9 of Part Two of the Fifth Schedule of the VAT Act shall not be recoverable by the Maltese gaming company.  The reverse charge mechanism would be applicable solely to the supplier of the service, but not to the Maltese Company.

Services which are deemed to be outside the scope of the aforesaid definition, include but are not limited to marketing and advertising, hosting, consultancy fees, training etc; services which often constitute a considerable expense to the remote gaming company.

The shared conduct agreement allows the Maltese Company to form strategic alliances with a partner, located in VAT-friendly or VAT-neutral jurisdictions and share a common ground in the provision of specifically-defined gaming services.  Prospective applicants must apply for the approval of the LGA to the proposed share conduct.

The Authority shall then review the documentation submitted by the licensee, conduct probity tests on the proposed party to the Authority and notify the licensee with its approval or otherwise. The Authority may request any amendments to the Proposed Agreement which it considers necessary.

If the Authority approves the proposed agreement, or if the Authority has requested any amendments to the Proposed Agreement and the draft amendments proposed by the parties are to the Authority’s satisfaction, the parties to the shared conduct may execute the approved agreement. The parties must submit a certified true copy of the final Agreement to the Authority within twenty (20) days of execution.

General Conditions to the Shared Conduct Agreement

No direct or indirect agreements which render any or all provisions of the approved Agreement inoperative or which have the effect of amending said Agreement may be entered into by the Parties. Any such agreements would be void and of no effect.  The parties to the joint venture must be equal partners pursuing the same economic goal for a split of the profit, in pre-agreed portions.

For a shared conduct agreement to be approved by the Authority, it is imperative that the licensee retains all gaming responsibilities. The third party involved may not conduct any form of gaming on behalf of the licensee, but may only be responsible for non-gaming activities.  The non-gaming activities can include activities which fall outside the scope of the aforesaid exemption.  The licensee shall remain responsible for adherence to any applicable legislation, regulations and directives issued by the Authority.

The licensee must submit the statements of account for the activities conducted under the shared conduct agreement to the Authority within 180 days from the end of its financial year. These must clearly and separately indicate the total revenue, the revenue-share entitlement, the total costs made and the cost-share commitment.


The Shared Conduct has the advantage of minimising the VAT repercussions for the Maltese licensed company.  This has obvious tax advantages for all companies which enter into profit-sharing arrangements with the Maltese licensed company.  As profit-sharing is calculated as a percentage of the net revenue, a lower VAT rate translates itself to a greater pool of distributable revenue for profit-sharing.

Furthermore, this allows an easier distribution between the profit-sharing companies as no contingency has to be made by the Maltese licensed company for the VAT on certain supplies.

Our specialised gaming unit can assist you in all aspects of the shared conduct by providing bespoke tax advice and through the drafting of the shared conduct agreement.  Contact us for bespoke VAT advice or send us an email on

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