Malta Yacht VAT Leasing Rates

For The Malta Super Yacht VAT Registration Programme, the Malta VAT Department has determined that when a Malta company purchases a yacht and lease purchases it to third parties, then VAT is due on the lease as this a supply of a service in Malta.

The rate of VAT on this type of supply would be the standard rate of 18%, but the Malta VAT department has established that VAT charges should only on the portion of the lease during which the yacht is in EU waters.

Based on the new rules implemented in February 2019 by the Commissioner for Revenue, the new directive bases VAT on the “extent to which the pleasure boat is effectively used and enjoyed by the lessee within and outside EU territorial waters”. This calculates the “preliminary ratio”. 

The new VAT is calculated as follows:

Firstly, calculate the Preliminary Ratio = (Total Use Inside EU Waters) / (Total Use Inside & Outside EU Waters)

Secondly, calculate the actual VAT payment = (Malta Standard VAT Rate) X (Value of Yacht)

Finally, calculate the new rate = Preliminary Ratio X VAT payment

Here is an example to illustrate the above point.

Let’s say that you spend 182 days in Malta and 183 days in Miami. That makes the Preliminary Ratio 0.4986.

Superyacht Value = €75 million
VAT in Malta = 18%
Actual VAT payment = €13.5 million

€13.5 million X 0.4986

Therefore, the new rate of VAT is €6.73 million.

Superyacht VAT Registration Homepage
How to Reduce your Superyachts VAT
Rules and Conditions for Superyacht VAT

If you would like more information about the relevant stages and what you need to be more tax effective, kindly enquire below or call us directly on +356 2122 7553.

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