The Maltese VAT Department has recently issued new Guidelines for the VAT treatment of Professional Health Services, which are intended to provide Guidance on the application of the VAT exemption for medical care provided by regulated professionals, including psychologists. The VAT Act exempts the supply of services by a person in the exercise of any profession regulated by the Health Care Professionals Act. This provision implements Article 132 (1)(c) of the VAT Directive which provides that the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned is exempt from VAT.
According to the published guidelines, the VAT Department considers that medical care services, when provided by regulated professionals fall under this exemption, including when provided by psychologists. To ensure the correct application of the relevant provision of the VAT Act, the Guidelines define “medical care” to mean “any service relating to the protection, maintenance or restoration of the health of the patient, including mental health”. Consequently any services provided by health professionals that are not primarily for the benefit of the patient do not fall under the exemption.