Malta VAT Yacht Leasing Guidelines
In terms of the guidelines published by the Maltese VAT Department, the supply of leasing services is taxable according to the extent of use of the yacht within EU territorial waters, provided that the lessor is a Malta company.
The guidelines establish an estimated percentage portion of the lease based on the time that the craft is presumed to be used within EU territorial waters. These presumptions are tied up to the length of the vessel and its means of propulsion (power or sailing).
Overview of the Requirements
- The yacht must come to Malta, at the beginning of the lease period and at the end of the lease when the purchase option is exercised;
- The leasing agreement is to be concluded between a Maltese company as lessor and any foreign person or company as lessee;
- Prior approval of the lease agreement must be sought in writing from the Commissioner of VAT who is to confirm the rate applicable according to the use in EU territorial waters (depending on the size and propulsion of the craft), as well as the acceptability of the value of the craft as declared. For this purpose a valuation certificate of the craft shall be submitted with the application to the VAT department for approval;
- The Lease installments and VAT thereon shall be payable every month and the lease period shall not be less than 12 months and shall not exceed 36 months. The recommended period is that of 12 months;
- The lessor shall be expected to make a profit from the leasing agreement over and above the value of the boat;
- Any purchase value at the end of the lease agreement shall not be less than 1% of the original value of the yacht and this will be subject to the standard rate of VAT at 18%.
Yacht Finance Leasing
|Type of Yacht||% of lease subject to VAT||Effective rate of VAT|
|Yachts over 24 metres in length||30%||5.40%|
|Sailing yachts between 20.01 and 24 metres in length||40%||7.20%|
|Motor yachts between 16.01 and 24 metres in length||40%||7.20%|
|Sailing yachts between 10.01 and 20 metres in length||50%||9%|
|Motor yachts between 12.01 and 16 metres in length||50%||9%|
|Sailing yachts up to 10 metres in length||60%||10.80%|
|Motor yachts between 7.51 to 12 metres in length (if registered in the commercial register)||60%||10.80%|
|Motor yachts up to 7.51 metres in length (if registered in the commercial register)||90%||16.20%|