Value-added tax on Yachts
The world leading association of law firms (Lex Mundi) helps you to Save on VAT - totally legal!
Did you know that the European VAT value of a purchased yacht is as low as 5.4 percent? Use our experience and knowledge and don´t pay more, full compliance with EU tax and customs regulations guaranteed!
What is even better, your yacht can still change flag after only 12 months - well be glad to show you how.
VAT on Maltese registered pleasure yachts reduced to 5.4%
The Maltese VAT Department has just published a guideline about the taxation of yachts which are lease-purchased to third parties by a Maltese company. For the purposes of these guidelines, a lease-purchase is seen as a situation whereby a Maltese company purchases a yacht and leases it to a third party with an option in favour of the third party to purchase the boat at a reduced price at the end of the lease.
Until the publication of this guideline, lease-purchasing was something of a touch-and-go situation as regards the payment of VAT and the new guide lines seek to regularize the payment of VAT on this type of operation related to yachts.
A consequence however of these new guidelines is that with careful planning, the lessee of the yacht can now become the owner of an EU VAT-paid yacht by paying as little as 6.18% VAT on the original value of the yacht. However tax and costs on the transactions will have an incidence on the final outlay raising the total outlay by about 2%. Further details can be provided on request.
Yacht Registration Requirements
In order to register your yacht permanently under the Maltese flag, you must provide the following documents within six months from provisional registration:
1. A Survey Certificate from an authorized surveyor in the port where the yacht lies attesting the yachts seaworthiness;
2. If the yacht is more than 24 metres in length, an International Tonnage Certificate is required
3. A bill of sale showing that the Maltese company has bought the yacht, or a builder's certificate in the name of the Maltese company if the yacht is new or has never been registered anywhere previously
4. A radio inspection form and a radio licence application, which must be filled in by an authorized surveyor in the port where the yacht lies.
5. A Carving and Marking note from an authorized surveyor in the port where the yacht lies
6. If the yacht has been registered previously outside of Malta, a certificate showing cancellation of registry from that last country of registry (deletion certificate)
The Maltese VAT Department has just published a guideline about the taxation of yachts which are lease-purchased to third parties by a Maltese International Trading Company (herein called an ITC). For the purposes of these guidelines, a lease-purchase is seen as a situation whereby a Maltese company purchases a yacht and leases it to a third party with an option in favour of the third party to purchase the boat at a reduced price at the end of the lease.
Until the publication of this guideline, lease-purchasing was something of a touch-and-go situation as regards the payment of VAT and the new guide lines seek to regularize the payment of VAT on this type of operation related to yachts.
A consequence however of these new guidelines is that with careful planning, the lessee of the yacht can now become the owner of an EU VAT-paid yacht by paying as little as 6.18% VAT on the original value of the yacht. However tax and costs on the transactions will have an incidence on the final outlay raising the total outlay by about 2%. Further details can be provided on request.