Maltese Yacht VAT scheme

The government of Malta has put in place a set of guidelines on the payment of VAT on leased Yachts. The regulations apply when a company registered in Malta buys a Yacht and decides to lease it to a third party. This system was put in place to help the owners of these luxury vessels to pay their VAT. The VAT payable is calculated from the proportion of time the yatch is supposed to navigate in the EU territory. It also enables them to acquire a certificate cleared of VAT arrears at end of the arrangement.
The general outline of this scheme was put with the following indicators;

  • The system is meant for companies registered in Malta. The firm to buy the craft, should have all the required paperwork including a VAT number.
  • After acquiring the vessel and becoming the owner, the company (lessor) could lease its asset to a client (lessee) and this is regardless of nationality
  • The two parties sign a lease-sale agreement. The agreement encompasses terms of use of the Yacht and after the contracted period is finished the client could buy the luxurious yacht at agreed price.
  • The company (lessor) is not liable for VAT payment to the merchant of the Yacht. This is possible even if the Yacht was bought domestically in Malta, from any EU country or imported abroad. There are different means applicable that would eventually free the lessor from VAT payment.
  • In order to benefit from this scheme, the company/owner of the craft must refrain from leasing it serve for business purposes such as provision of services. The EU levies tax on all vessels conducting business in its waters.


How the Maltese scheme was designed to work
Malta presents VAT rates to be paid by the lessee on amenities given by the Yacht owner. These would be centered on the type of vessel and the existing chargeable rates in the EU waters. Bigger vessels would be expected to spend less time in the EU territory while smaller vessels could use a longer time. The VAT commissioner is responsible for giving the required authorizations and it is imperative for clients to submit information regarding their vessels such as their size, worth, status (new or second-hand), etc. It is from this information that the department of VAT could instruct on the applicable VAT rate according to the scheme.
A provisional certificate is given by the department when everything has checked out. This certificate is given at the commencement of the lease. The document would protect the lessee from having trouble with the responsible authorities at harbors. Finally, the lessee at the end of the lease agreement can buy the yacht which has been cleared of VAT and a VAT certificate produced in the name of the lessee.
Professional Assistance
For more insights on the registration of Maltese yatch VAT, you may contact SIGTAX. Our invaluable team, which consists of expert lawyers, accountants and consultants will give you detailed information and counsel during each step.  Our lawyers can provide you with finer details on the legal aspects pertaining to Malta’s yatch VAT registration scheme so that you don’t skip any necessary steps.


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