The Malta VAT Department issued new guidance on 28 February 2019 in relation to the VAT treatment of long-term yacht leasing.
The new rules can substantially reduce the amount of VAT due and payable on lease amounts charged by the Lessor, depending on the extent that a yacht is used and enjoyed in EU territorial waters.
However, it is important to note that long term yacht leasing is considered to be a leasing arrangement for more than 30 continuous days and there are specific criteria for applying this methodology, including:
Buying a Yacht Exclusively for a Business Purpose
The VAT treatment of the purchase of the yacht by the Lessor, will, on the basis that the yacht is purchased exclusively for a business purpose, be VAT neutral.
There will be varying administrative arrangements applicable depending on whether the yacht is purchased via importation in the EU, purchased from another EU country or purchased from a seller in Malta.
Selling the Yacht
The application of VAT on the sale of the yacht by the Lessor will depend on whether the yacht is being sold in Malta, in another EU member state or outside the EU.
If you would like more information on the new Yacht Leasing Rules in Malta or have specific requirements you wish to discuss, please contact email@example.com or telephone Samantha Snow on +356 2099 1531.