Being at the centre of the Mediterranean surrounded by crystal blue waters, Malta has been the number one berthing country for pleasure yachts for a number of years. This is mainly attributable for a number of factors, including Article 59A of the VAT directive.
Article 59A of the VAT Directive allows individuals to pay VAT on the lease of a yacht depending on the percentage and effective use within European waters. The new guidelines provide a concise point-of-reference and a clear mechanism in identifying and computing such use. This directive allows individuals who wish to own a pleasure yacht to reduce the VAT element from 18%, the standard VAT rate in Malta, to an effective 6.12% dependent on the percentage use in EU territorial waters. The process and method of such reduction in VAT rate is outlined in detail here.
However, such guidelines issued are specific for the leasing element of the structure.
The brief overview of the new guidelines is outlined below;
Such guidelines may be accessed from the document listed here-under.
For further information regarding VAT on pleasure crafts and how you can benefit from such legislation, you can contact us by following the link, and one of our tax experts will get back to you shortly.
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