During the past decade Malta has consolidated its status as an international centre of maritime excellence. Currently Malta has the largest shipping register in Europe and the sixth largest in the world.
Malta has also become a world leader in terms of commercial yacht registration.
Yacht Registration in Malta
Commercial and pleasure yachts can be provisionally registered under the Malta flag with the appropriate application subsequently being filed with the Malta Maritime Authority. Once the requirements have been fully met an operational certificate will be issued.
- Commercial yachts to be registered under the Malta flag must be owned by Maltese or European Union citizens, or corporate entities established in Malta.
- Non-EU international owners can register their commercial yachts in Malta provided that they appoint a resident agent in Malta. Dixcart can act as a resident agent and assist with this process.
Importation of Yachts into Malta for Subsequent Commercial Use
Importing a commercial yacht into Malta requires the yacht to physically enter a Malta port for the relevant VAT and customs procedures to be undertaken. This will result in the effective importation of the yacht into the European Union, when the appropriate importation documentation is released. The yacht is then free to sail within EU waters.
Temporary Importation – An Alternative to Importation
Owners of non-EU flagged super yachts who are non-EU residents can still use their yachts within the EU by placing the yacht under Temporary Importation via Malta.
The yacht must physically enter a port in Malta for temporary importation procedures to be undertaken. The yacht can then move freely within EU waters and from one member state to another for the maximum permitted period of 18 months.
Which VAT and Corporate Tax Rates are Applicable for Commercial Yachts?
The standard rate of 18% VAT is applicable on the importation of a yacht intended for commercial use in Malta.
A VAT deferment scheme is however available which replaces the need to physically pay the 18% VAT, with the provision of a bank guarantee to the VAT department. This guarantee must be equivalent to 20% of the VAT due. Once commercial activities have commenced the bank guarantee will be released within a maximum 4 months.
- Corporation Tax
The standard Malta tax regime applies, which includes a refund of 6/7ths of the Malta tax paid in relation to profits arising from trading operations. This results in a net effective corporate tax rate of 5%.
Chartering Operations Being Undertaken in Malta
The Malta VAT authorities have issued guidelines relating to the short-term chartering of yachts in Malta. These define the estimated percentage proportion of the charter that is subject to VAT, based on the length and propulsion of the yacht.
For example, in the case of a sailing or motor yacht which is over 24 metres in length, only 30% of the charter fee is subject to VAT. This results in a net VAT rate of 5.4%. Additional details can be found in Information Note: IN341 – Malta and the Attractive Yacht Leasing Scheme.
Importation of Yachts into Malta for Subsequent Private Use
The importation procedures and VAT deferment mechanism, as detailed above, also apply to pleasure yachts. In relation to the deferment scheme, an additional advantage is available as no bank guarantee is required for pleasure yachts.
A leasing structure can instead be put in place which must meet the guidelines stipulated by the Malta VAT Authorities. This mechanism enables VAT payments to be calculated on the percentage of time that the vessel is deemed to sail in EU waters. A VAT paid certificate is supplied at the end of the lease term, provided that certain conditions have been met. A detailed explanation of the pleasure yacht leasing structure can be found in Information Note 341, detailed above.
Dixcart has extensive experience in the maritime and yachting sector. Professional staff at the Dixcart office in Malta assist yacht owners and maritime lawyers to establish the types of structure detailed above and to undertake the ongoing related work to ensure that these structures are managed as efficiently as possible.
If you require additional information regarding Malta Yacht Registration whether for commercial or private use, please contact Sean Dowden or Jonathan Vassallo: email@example.com at the Dixcart office in Malta, or your usual Dixcart contact.