Simple breakdown of the new Superyacht VAT Registration guidelines.
Once a company purchases the Yacht and leases it to the individual/company, we need to determine the Preliminary Ratio. This ratio is taken using reasonable documentary/technological data to determine the actual effective use and enjoyment by the ‘lessee’ of the Yacht within and outside EU waters during the tax periods.
This ratio is used to determine the portion of the lease payments. For example:
Value of the Yacht = €50 million
Malta’s VAT rate = 18%
Standard VAT payment = €9 million
However, this has not taken into account the ratio. For instance, if the owner of the Yacht spends 50% of their time in Malta (inside EU waters) and 50% of their time in Miami (outside EU waters), the Preliminary Ratio is 0.5.
Therefore €9 million X 0.5 = €4.5 million VAT.