Aviation Tax Planning

Aviation Tax Planning | Papilio Services Limited

The beneficial aviation tax regime in Malta makes it an ideal jurisdiction to consider setting up an aviation company. Our aviation Malta Tax Advisors can offer specialist aviation tax advice to aircraft owners or aviation management companies (Malta Company Formation services) with regards to setting up a tax efficient operation. Our aviation tax consultants are also able to give advice on Malta aircraft registration requirements.

Private Aviation Companies Incorporated in Malta

Private aviation companies that are set up in Malta are subject to a standard tax rate of 35%, which is applied on a worldwide basis. However, if the private aviation company is set up by non-resident shareholders, the Malta tax system allows for the entitlement of a tax refund of 6/7ths of the tax paid on the profits provided a distribution is made. This would mean an effective aviation tax rate of just over 5%.

Private Aviation Companies – Moving Management and Control

Private aviation companies that are set up in another jurisdiction but have its effective management and control moved to Malta would be deemed as tax resident in Malta. Private aviation companies that have moved management and control to Malta would be subject to tax on:

  •  All income arising in Malta
  • All income that arises outside of Malta that is remitted to Malta (remittance basis)
  •  All chargeable gains realised in Malta

Any chargeable gains that are realised outside of Malta but remitted to Malta would not be subject to tax in Malta.

Private aviation companies that generate income from the international transportation of passengers or goods via an aircraft that is owned, leased or operated by that company, is deemed to arise outside of Malta. The income would still be deemed to have arrived from outside of Malta regardless of the fact the aircraft may have travelled into a Malta airport. The country of registration of the aircraft would also not affect this aviation tax ruling. The aviation tax benefits allowed by the Malta tax system naturally makes Malta an attractive jurisdiction for those wishing to set up a private aviation company.

Aviation Tax Planning Opportunities

Malta also has a double tax treaty network in force with nearly 70 countries around the world which offer a myriad of aviation tax planning opportunities. Malta also has attractive aircraft leasing VAT initiatives that can help reduce the effective rate of VAT. Our aviation tax consultants can advise accordingly with a tailor made and bespoke solution for your specific needs and requirements.

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Malta Aircraft Registration

Aircraft Leasing VAT Programme