By providing a fully transparent and cost-effective yacht and ship registration process, Malta – as a full member of the European Union – has in recent years managed to become the largest maritime shipping registry in Europe.
With a solid legal framework which provides yacht owners and finance lenders a high level of security, the Maltese Flag has firmly become a flag of confidence in the maritime industry.
Yacht-owners choosing to register under the Malta flag could benefit from:
- Full documentary title of ownership
- Low company formation and registration costs.
- Complete tax exemptions, and benefits for owners, charters and financiers of Maltese yachts.
- No restrictions on the nationality of the master, officers and crew serving on Maltese vessels.
- No restrictions on the nationality of shareholders and directors of Maltese shipping companies.
- No restrictions on the sale and mortgaging of Maltese-registered yachts.
- No trading restrictions.
- Preferential treatment for Maltese yachts in certain ports.
- Serious and efficient maritime administration.
- Flag state inspectorate ensuring adherence to international standards
- Easy access to decision-makers within the competent authorities, backed by a qualified and efficient team of technical officers available for urgent matters on a 24- hour basis.
Apart from an effective and highly transparent Malta Flag registration [check out our Yacht Ownership page] process, the local authorities – in full co-operation with EU decision makers – have introduced fiscal incentives for yacht owners, such as:
- YACHT LEASING STRUCTURES
whereby, upon importation into Malta, a yacht could effectively reduce the VAT rate due on the purchase and further usage of the yacht.
Guidelines regarding the VAT treatment of hiring of pleasure yachts have been amended and published by the Malta Ministry of Finance on 12/03/2020.
Whilst still based on Article 59a of the EU VAT Directive, the new Guidelines reflect recent EU developments and best market practices.
In terms of the amended Guidelines, the general principle remains that 18% Maltese VAT applies on the leasing of pleasure boats that are deemed to take place in Malta in terms of standard VAT rules.
However, where certain conditions are satisfied, the lessor can make use of ‘Use and Enjoyment’ provisions such that the VAT charged would be commensurate with the actual time that the yacht spends within EU territorial waters. Such provisions can only be used when the determination of the actual time within / outside EU territory is possible.
Further guidance is provided in the amended Guidelines on how the VAT returns of the lessor should be adjusted such that the VAT initially charged thereby to the lessee is adjusted to reflect actual use and enjoyment by the lessee after the end of the VAT period.
For additional information, please direct your queries to the Managing Director MALTA YACHTING Team.
- SPECIAL VAT TREATMENT OF SHORT-TERM CHARTERING
Whereby a yacht choosing to charter out of Malta could benefit from effective an effective lower VAT rate on the charter fee.
For additional information, please direct your queries to the Managing Director MALTA YACHTING Team.
