Malta VAT Yacht Solution

VAT Solutions for Yachts in Europe

Malta Vat Yacht Solution


Malta is the largest maritime registry in Europe and the 6th largest in the world. Particularly, it is one of the largest registries in Europe for pleasure yachts and super-yachts. Malta’s success in the maritime industry, but particularly in relation to pleasure yachts, is based on two main pillars:

1. The reputability of its flag and register.

Malta provides for a straightforward procedure for registration and deletion of vessels, including the registration and discharge of mortgages being fundamental for the purpose of obtaining
financing; competitive registration and renewal fees; minimum technical requirements in relation to pleasure yachts allowing owners to freely design their own yachts and a 24 hour service
to deal with urgent matters. There is a flag state inspectorate to ensure adherence to international standards and there are no restrictions on the nationality of the master, officers and crew serving on Maltese vessels.

2. The possibility of fiscal planning and VAT payment minimization in the context of yachts and super-yachts used for pleasure purposes. Specifically in relation to yachts used for pleasure in the European Union (EU), Malta offers a favourable regime for Value Added Tax (VAT) minimisation, potentially down to 5.4%, through a leasing set-up.





Country Highlights

FLAG:Largest registry in Europe
6th in the world
VAT ON PLEASURE YACHTS: 5.4% - 18% effective rate
REGISTRY GROSS TONNAGE: Over 57 million VESSEL REGISTRATION: 48 hours
NO. OF VESSESLS REGISTERED: over 11,000 ACCESSIBILITY & EMERGENCY: 24 hours registry services


Legal Basis

As per the EU Customs Code and its implementing provisions, the rules regulating the use of pleasure yachts in EU waters revolve around two main factors:     

  • whether the yacht is owned by persons or entities established in the EU or otherwise; and
  • whether the yacht shall be used in the EU temporarily or otherwise.

Yachts owned by persons or entities established outside the EU, or more specifically outside the customs territory of the community, and which will be used for a short-time in the EU, may be temporarily brought into and used for private purposes in the EU, and this without the need to pay customs duties or VAT. In such cases the yacht has to be placed under the ‘temporary importation procedure’. Once put under the temporary importation regime, a yacht may be freely used in the EU with no further customs formality up to 18 months. In cases of yachts owned by a person or entity established in the EU for private use whether temporary or otherwise, or in all other cases where the private use of the yacht in EU waters is not temporary, VAT implications arise. In such cases VAT liability arises for yachts purchased in or formally imported into the EU.


Benefits

  • VAT Rate 5.4% for yachts > 24 meters;
  • EU Sailing of Yachts Fee circulation in the EU;
  • VAT Paid Certificate;
  • No Eligibility Requirements;
  • Fast Procedure 12 month procedure for a VAT paid yacht;
  • Easier resale of yacht in the EU.


Eligibility

  • The leasing of the yacht is undertaken through Malta and hence the yacht must be in Malta at the beginning of the lease;
  • An initial contribution, being the first lease payment, equivalent to 40% of the value of the yacht, which is paid by the lessee to the lessor company;
  • The lease installments are paid every month;
  • The lease agreement does not exceed 36 months;
  • The lessor company, undertaking an economic activity, makes a profit from the leasing agreement over and above the value of the yacht.


Process & Timeline




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