Malta is a major international hub for yachting activities
Up to the end of August 2017, more than 8,000 ships with a combined gross tonnage of 74 million were flying the Maltese flag. There were approximately 230 commercially registered yachts and 450 privately registered yachts over 24m. More recent figures given by Transport Malta in 2019 indicate more than 780 superyachts are registered under the Malta flag.
♦ An internationally recognised and reputable jurisdiction, 1st in the EU, and 6th Worldwide;
♦ The Maltese Flag is on the White list on the Paris MoU and Tokyo MoU, which are taken into account when targeting ships for inspections;
♦ Costs for the incorporation and operation of a company including vessel registration fees and tonnage taxes are low;
♦ Flag of confidence;
♦ Effective securitisation of interests of credit institutions by virtue of registration of a mortgage (carrying considerable prior ranking) over such vessel;
♦ Ease of execution of registered mortgages and consequent vessel repossession;
Recognition from all major classification societies;
♦ Exemption from payment of VAT on the value of the yacht, provided that such yacht is used for commercial purposes (chartering) on the high seas subject to restrictions;
♦ No restrictions on the nationality of masters, officers and crew; and
♦ Input VAT may be claimed on purchases made (e.g. equipment, fuel and general supplies) which are used for chartering activities.
VAT Guidelines on the treatment of Yacht Leasing
A lease of a pleasure boat is a service whereby the lessor (the owner of a boat) contracts the use of the boat to the lessee (the person who leases the boat) in return for a consideration. For the purpose of VAT, the lease of the boat is a supply of services with the right of deduction of input VAT by the lessor, where the right of input VAT applies. The supply of services is taxable according to the use of the boat, attributed within the territorial waters of the European Union (EU), provided that the lessor is a Maltese company which is leasing the boat to any Maltese or non-Maltese person or company. For more about the applicable conditions please contact us.
Pleasure Yacht Registration
The Merchant Shipping Directorate considers a private registered yacht to be any pleasure yacht, of 6 metres in length or more, which does not carry passengers for reward and is not engaged in trade but is used for the sole purpose of the owner.
The registration process is rather straight forward. A yacht is normally registered with a provisional registration which has a validity of six months. This can be extended for up to a year depending on the circumstances. During the period of provisional registration, the owners of the yacht are required to submit the documentation for the issuance of a permanent certificate. This would normally include, the cancellation of the certificate from the previous registry, survey certificate and any other documentation that may be requested by Transport Malta.
Commercial Yacht Registration
In order for a yacht to be commercially registered it must abide by the Commercial Yacht Code. The Commercial Yacht Code was developed in line with international regulations and other industry standards and caters for yachts of 15 metres in overall length and that do not carry cargo and do not carry more than 12 passengers. Yachts that are eligible for registration are mainly categorized as:
♦ Yachts of not less than 15 metres and not over than 24 metres;
♦ Yachts of over 24 metres but with a gross tonnage of not more than 500 gross tons; and
♦ Yachts of over 24 metres but with a gross tonnage of not more than 3,000 gross tons.
Short Term Yacht Chartering
The commissioner for VAT issued guidelines for short-term charters, i.e. charters of less than 90 days. A yacht intended to be used for leisure purposes is a supply of a service which is taxable at the standard rate of VAT. Subject to certain conditions, the taxation of this supply would be limited to that portion of the use of the yacht within the territorial waters of the European Union (EU). Depending on the size and propulsion of the yacht VAT may vary between 5.4% and 18%.
Rosemont Malta Yacht Services – How we can help
♦ Ship registration under Malta flag for all types of yachts, including vessels under construction;
♦ Registration and discharging of mortgages;
♦ Engagement of technical individuals to perform the necessary survey requirements;
♦ Specific Tax and VAT advise for setting up tax efficient structures including leasing structures;
♦ Handling of ancillary compliance services such as radio licence, performing searches, deletion of registry and transfer of vessels;
♦ Preparation of crewing contracts;
♦ Yacht management services;
♦ Bareboat and time charter registrations;
♦ Resident agent services;
♦ Assistance in other areas related to the maritime sector as may be required from time to time.
Rosemont International companies provide advice and assistance on the purchase and sale of yachts, as well as the ownership structuring, and even technical and safety management. Read more about the yacht related services offered on the dedicated website: http://yachtownership-solutions.com/