AMICORP MALTA - YACHT REGISTRATION
Malta's reputation as an experienced, reliable, and efficient maritime jurisdiction has positioned Malta as the largest ship register in the European Union. Its strategic location in the center of the Mediterranean, natural harbors, and services such as shipbuilding and repair, freeport, bunkering, ship supplies, and towage have made Malta a leading maritime hub.
As a yacht owner, it is in the owner's best interest to choose a fiscally competitive jurisdiction, highly accessible and reputable. Also, registering the yacht under a reputable flag is essential to sail in EU waters with peace of mind.
Depending on the intended use, yachts can be registered under the Malta flag either as a private pleasure yacht or as a commercial yacht:
- Pleasure yacht registration is usually done in two stages. The provisional registration, whereby the vessel will be issued with a provisional certificate of registration for a six-month period during which the yacht may navigate freely, followed by the permanent registration.
- Commercial yacht registration is similar to that of pleasure yachts; however, the vessel registers with the Malta Commercial Yacht Register and must also comply with the Commercial Yacht Code (Cod') or equivalent standard. The concept behind the Code is to offer a proposition to those owners and operators who require specific interpretation to their design, operational, and safety requirements within the framework of international regulation.
BENEFITS OF YACHT REGISTRATION UNDER THE MALTA FLAG
- Yachts may be registered on behalf of legally constituted corporate bodies or entities irrespective of nationality
- Twenty-four hours, seven days a week service in response to urgent matters from the Maritime Authority
- Straight forward and low company formation, ship registration, and tonnage tax costs
- Maltese law provides for the registration of yachts that are being built or equipped
- Attractive tax incentives to yachts and superyachts owners, encouraging commercial operation
- No restrictions on the sale or mortgaging of Maltese registered yachts and superyachts
- A dynamic registration with one of the largest ship registers in the world and very active in the EU
- A member of the European Union with political, fiscal, and social stability
YACHT LEASING IN MALTA
Following the amended VAT Guidelines issued by Malta Inland Revenue Department in March 2020, the amount of VAT resulting from the leasing of a yacht can be significantly reduced from the standard 18% rate depending on the 'Use and Enjoyment Provisions,' which refers to the percentage of time the yacht spends in local EU waters as opposed to outside EU waters. Thus, if the yacht's 'Use and Enjoyment Provisions' in a particular VAT period is less than 100% in the EU, the lessor can claim a refund of VAT that would have been overcharged thereby.
The method of recording (and proving) that the yacht was used in/out of EU territorial waters is by using technical data, GPS/AIS data, logs retained by the captain, etc. Prior approval from the VAT Department is required (in writing) before adjusting the VAT charged based on the effective use and enjoyment.
While the VAT treatment of purchasing a yacht will depend on where the yacht is purchased, the general principle is that this should be VAT neutral if the lessor uses the yacht exclusively for business, such as yacht charter.
Malta has a highly attractive VAT deferment process whereby rather than paying the full VAT and then claiming the same back, provided the yacht will be used for leasing, prior authorization may be sent to the VAT Department for such VAT to be deferred, this without the need for a bank guarantee.
In the event of the sale of a yacht, no VAT would be chargeable by a seller of the yacht provided that the seller had not claimed Maltese VAT charged on its purchase.
Through Malta's implementation of its 'tonnage tax' system, commercial yachts benefit from having the profits on their shipping activities charged with a tonnage tax rather than income tax. This results in significant savings on the operational cost of the vessel.
If the yacht does not qualify to benefit from such tax exemption, yacht financiers may still benefit from the low effective income tax of 5%. In addition, any foreign income tax incurred on the yacht's commercial operations would be available as a credit to offset against the Maltese income tax, to the effect that the Maltese tax may even, in certain cases, be reduced to 0%.
OUR SERVICES
Amicorp Malta provides a broad range of services to various types of entities. Using the expertise and capabilities of our Malta office and our global network of offices and professionals, Amicorp Malta can guide and assist you through the process of yacht registration. At the same time, together with its partners, guide on the taxation-related matters buying/managing your valued asset.
Amicorp Malta Limited is authorised by the Malta Financial Services Authority to act as a Trustee or Co-Trustee to provide Fiduciary Services in terms of the Trusts and Trustees Act and to act as administrators of Private Foundations in terms of Article 43(12)b of the Trusts and Trustees Act.
For more information:
Colin Gregory, Managing Director (Amicorp Malta) - c.gregory@amicorp.com
Mark Scicluna, Director – Legal and Corporate Services (Amicorp Malta) - m.scicluna@amicorp.com
Alex Du Cane, Senior Account Manager (Amicorp Malta) - a.ducane@amicorp.com