Malta's regime and EU VAT on boats and yachts - When, how much

Dr Daniela Bartolo | 21 Mar 2012

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The European Union (EU) Value Added Tax (VAT) is, broadly speaking, consumption tax on goods and services brought and sold for use or consumption within the EU VAT Area. This form of taxation is deemed favourable as it strikes a better balance between direct and indirect taxes.

The relevance of VAT for boats and yacht owners lies in the fact that VAT liability arises for vessels purchased in or formally imported in EU waters.
In being a consumption tax, while it must be paid to the revenue authorities by the seller of the goods, deemed as a “taxable person”, the charge is borne by the final consumer and not the business owner.
In practice, VAT is collected each time a transaction takes place in the supply chain however businesses may recover VAT paid on the products and services (input tax).

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