Yacht registration in Malta
The Yachting Industry in Malta has two key facets, namely pleasure yachts and commercial yachts, the latter used as part of a business activity and to which the fiscal advantages outlined above for Malta shipping organizations also apply.
Any yacht to be registered under the Malta flag, being pleasure yachts or commercial yachts, shall primarily be registered provisionally for six months, for which only a few documents are required to be filed with the Maltese Maritime Authority. Thereafter the operational certificate is issued upon fulfillment of all requirements.
A yacht can be registered as commercial under the Malta flag provided that it is owned by persons qualified to own a Maltese yacht. Such persons include Maltese or European Union citizens, as well as bodies corporate established in Malta. Nonetheless, Maltese law provides for other possibilities, namely to register the yacht in the name of an international owner and such owner would appoint a resident agent in Malta.
Alternatively, a shipping organisation can be set up, that is, a Maltese company set up for the purpose of owning the yacht and hence be the registered owner of the vessel. If the latter is opted for, it is to be noted that a shipping organisation benefits from various fiscal advantages, such as profits being taxed at a net effective tax rate of 5%, no VAT is charged on chartering contracts, VAT paid on purchases by the Maltese company can be reclaimed.
In the case of pleasure yachts, in addition to the brisk registration process, Malta offers a favourable regime for VAT minimisation, potentially getting down to an effective rate of 5.4%, through a leasing set-up.
Beyond the advantages that the registration process and the VAT yacht leasing presents, Malta offers yacht marinas that may be found all over the Maltese islands. These include facilities for super yachts. Most marinas cater for requirements of yachtsmen, including fuel bunkering, technical services for repairs and services, luxury on-site facilities and immediate access to other off-site facilities.
VAT payable on Yacht registration
Completing the advantages presented in the registration process and in the VAT yacht leasing scheme, the yacht owners are also presented with the opportunity to choose from a choice of two different options on how to be charged and consequently pay VAT upon importation of the yacht.
Importation of a yacht is considered to be a vatable event, therefore VAT will have to be charged on the yacht’s value. Owners can choose from the following options:
- First option is to avail from the VAT deferment scheme. The Vat deferment option grants a delay on the VAT payment period, which instead of paying the full 18% VAT upon importation, the owner will be requested to pay 20% of the 18% VAT in the form of Bank Guarantee, which consequently will be released within 4 to 5 months from commencement date of the commercial activities. Then VAT will be paid throughout the leasing period.
- Second option is to pay the full 18% on importation and then claim such payment in the first VAT return which will be received in 5 months from later of :
- the date of submission of the VAT Return and
- the date of the deadline of submission of the VAT Return
(For example the first VAT Return is for the period March to May 2012, the yacht purchased in March (paid 18% VAT) and the VAT Return submitted on 30 June (deadline 15 July) – refund will be received on 15 December)