19 Jun The new yacht leasing VAT guidelines.
Malta offers a distinctive and complete range of maritime services and facilities, including one of the busiest Freeport areas in the Mediterranean, major oil bunkering facilities and a modern cruise passenger terminal which has led to the country becoming a well-established and reputable ship register. At the end of February 2019, the Malta VAT department published new regulations on leasing pleasure yachts. GCS Malta, your corporate service provider, has all the details below.
The VAT on vessels was previously determined on the type and length of the vessel. However, the new regulations, as published by the Malta VAT Department, calculate VAT depending on the effective period the yacht derives within the EU territorial waters. Hence, those who vessel outside EU waters will not be applied for such VAT transactions. With these new regulations, certain obligations need to be followed through.
- The lessor must have a Maltese VAT identification number.
- The vessel in question must be placed at the disposal of the lessee in Malta.
- The lessee must not be a person carrying out an economic activity.
- The lease arrangement must be in line with a yacht leasing agreement between the lessor and the lessee which must also be approved by the VAT department for the beneficial rates to be applied.
- Annual compliance obligations by way of the prescribed form must be attended to.
The new regulations indicate the importance of maintaining adequate records during the lease period. This includes reasonable documentary evidence and/or technological data. This is to ensure the preliminary ratio may be appropriately determined.
The preliminary ratio is calculated after the first year based on the effective use of the tax period. This shall be used for the first twelve months of the lease. An ‘actual ratio’ is calculated after the lapse of one year and shall be used as the provisional ratio for the subsequent year.
At GCS Malta, we can provide a comprehensive service to yacht owners and managers including; ship and yacht registration in Malta, short-term chartering of yachts, the planning of international tailor-made tax efficient structure and much more. Get in touch with GCS Malta today on +356 20161010 or send an email on [email protected].