During the years Malta has become a destination in the Mediterranean. The Maltese ship register is one of the largest in Europe and the Maltese aircraft register is also proving to be a successful Aviation Register attracting international airlines and other companies in this industry, primarily private and corporate aircrafts. Malta has become an important milestone in building a high value added ship and aviation service cluster in Malta.
There are two separate programmes that regulates the programmes for yachts and aircrafts but they are very similar. Both programmes are based on the principle of use and enjoyment of the yacht and aircraft and the understanding that such may be used outside the EU.
As a general rule, VAT in Malta is levied at a rate of 18%. To this effect, the Maltese VAT Department has established that when a Maltese company buys a yacht or aircraft which then leases such yacht or aircraft to third parties, then VAT is due on the lease at the normal rates of VAT in Malta, i.e. 18%, since this is a supply of a service deemed to be supplied in Malta.
However, the situation does not stop there. In fact, it has been established that VAT is payable only on that portion of the lease during which the yacht/aircraft is in the EU. How is one to calculate this? Since it is practically impossible to establish this with precision, the Department has issued its own “presumed” length of stay during which the yacht/aircraft is presumed to have been in EU based on the size of the yacht and in the case of aircrafts this is based on its range.
The following table establishes the percentage of lease that is considered to take place in the EU:
Type of yacht % of lease considered to take place in the EU
Sailing boats or motor boats over 24 metres in length 30%
Sailing boats between 20.01 metres and 24 metres in length 40%
Motor boats between 16.01 metres and 34 metres in length 40%
Sailing boats between 10.01 metres and 20 metres in length 50%
Motor boats between 12.01 metres and 16 metres in length 50%
Sailing boats up to 10 metres in length 60%
Motor boats between 7.51 and 12 metres in length (if registered in the commercial register) 60%
Motor boats up to 7.5 metres in length (if registered in the commercial register) 90%
Craft permitted to sail in the protected waters only 100%
Range of aircraft
7,000 and upwards 50%
5,000 – 6,999 40%
3,000 – 4,999 50%
0 – 2,999 60%
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