VAT on YACht leasing SCHEME

​An attractive scheme for pleasure yacht registration in the EU, whereby the yacht owner (a Maltese VAT registered company) leases the yacht to a third party at an arms length transaction for up to 36 months. For VAT purposes, the place of supply is where the yacht would be placed at the disposal of the customer, therefore the lease would need to start in Malta. The lessor would need to have a place of business in Malta. Only the lease portion attributable to the time the vessel spends in EU territorial waters would attract VAT. This portion is based on the length and propulsion type (motor or sail) of the yacht and could be as low as 30%, which could result in a VAT charge of just 5.4% of the yacht's cost. At the end of the lease, the lessee will have the option to purchase the yacht from the Maltese company at 1% of the yacht's declared value and on completion of this transaction the VAT Paid Certificate (valid in all the EU) would be obtained.

tax incentives

For ​qualifying shipping organisations;

0% tax on income from Shipping activities;

0% tax on gains or profits from the sale or transfer of a tonnage tax ship (or from the transfer of rights to acquire such ship);

0% tax on gains made from any disposal of shares or any other interest held in a qualifying shipping organisation owning or operating a tonnage tax ship​.


Why Malta?

Malta is perfectly located in the centre of the Mediterranean sea. Malta has the second largest maritime flag in Europe and has been an EU member since 2004. Equipped with international maritime hub services which include bunkering, towing, ship building and ship repair. 

Registration is fast and cost effective, this is the ideal country to register your ship and yacht.

yacht vat payment options 

Upon importation of the Yacht under the Yacht Leasing Scheme, the Owners can choose between two options on how to be charged VAT on importation, based on the yacht's value.

(i) VAT deferment scheme; pay 20% of the 18% VAT on importation through a Bank Guarantee which is released after the commercial activities start (up to 5 months later). VAT on the lease charges would be paid throughout the lease duration.       

(ii) Payment in full of the VAT on importation at 18% of the yacht's value.Then claim back this input VAT in the first VAT return on the Maltese company. The VAT refund is generally received 5 months after the VAT return deadline date (or 5 months after the date the VAT return was submitted if this was submitted after the deadline date).

registration 

Provisional registration can be obtained even during the vessel's construction. EU citizens and EU registered companies, may register a vessel under the Maltese flag, however if these are not Malta resident, they would need to appoint a resident agent. Non EU citizens would need to first form a Maltese company, whilst eligible Non EU companies would need to appoint a resident agent. 

financing

Significant capital investment requires strong financial backing; often obtained from commercial banks. The Security that can be placed with the Bank is key to obtaining the finance required, in the form of assets (including the ship or the yacht being purchased) that the bank can use to reduce it's risk exposure. Interest rates and duration of the loan are also subject to careful consideration. 

stamp duty incentives

(i) No stamp duty on the issue of shares, securities or any other interest (including mortgage registration) in a shipping organisation;

(ii) No stamp duty on the purchase, transfer or assignment of any security or interest in a shipping organisation;

(iii) No stamp duty on registration or transfer of a tonnage tax ship or transfer of any rights in such ship. 

Short term yacht charters

Yacht charters of less than 90 days, either with a crew or bare boat.  Only the portion of the lease attributable to the time the vessel spends in EU territorial waters would attract VAT (established using the length and propulsion type of the yacht). Certain input VAT is also reclaimable. Sailing outside EU territorial waters is an important condition to benefit from this reduced rate of VAT.    

bareboat charter

Bareboat charter registered vessels have the same rights and priviledges and the same obligations as any other vessel registered in Malta. Registration under a bareboat charter can last for up to 2 years. The bareboat charter registry governs the operation of the vessel, whilst matters concering title of the vessel, mortgages and encumbrances are governed by the underlying registry.     

Shipping organisation

We offer a work permit application service through which an employment license is issued to the employer for that specific person, to take up employment in Malta. Suitably qualified foreign persons with experience to carry out the job required (and difficulty to find suitable EU or local persons) would be more likely to obtain the work permit in Malta.  

COMMERCIAL YACHT

There are 3 classes of commercial yachts in Malta under the Commercial Yacht Code, based on the length and gross tonnage. A commercial yacht is one that does not carry cargo and does not carry more than 12 passengers. The annual tonnage tax (varies according to the size of the yacht) replaces income tax on income from ownership, management or operation of the Malta registered yacht. 

registration fees

Registration fees are payable on Initial registration and each year. These fees are based on the gross tonnage, the type and the age of the vessel (new vessels would attract less fees). 


Annual fees are split in 2 types, the basic fee and the tonnage tax. The tonnage tax depends on the tonnage of the vessel. 


shipping organisation & Tonnage tax ship

A Shipping Organisation is a Malta company with its main objects being Shipping related and having a place of business in Malta. There are attractive tax incentives for the shipping activities of the licensed shipping organisation, and even more incentives when the Shipping Organisation owns a Tonnage Tax Ship.  

 

A Tonnage Tax Ship has a gross tonnage equal to or greater than 1,000 GT and is community registered (EU or EEA), or all the ships owned, managed or operated by the Shipping organisation are effectively managed from within the community. The vessel would be entirely owned, chartered, manage, administered or operated by a licensed Shipping Organisation.