Malta Yacht Leasing

The VAT on Yacht Leasing Regulations of January 2006 have made it possible to reduce the value of the Yacht on the Lease thereby also reducing the effective VAT payable on the purchase of Yachts to as low as 5.4% VAT on the value of the yacht on the Lease and this by virtue of a Financial Leasing agreement made between a Maltese Company acting as Lessor and any other third party (who does not necessarily have to be a Maltese national or a Maltese Company) acting as Lessee. At a glance, the salient features of the Malta VAT on Yacht Leasing scenario are as follows:

 

  • Reduction in the value of the yacht on the lease agreement on which VAT is payable resulting in an effective rate of VAT payable as low as 5.4% on the value of the yacht on the Lease.
  • Reduction in value of the yacht and consequent VAT rate payable directly dependent on the length and type of yacht being leased. 
  • Lease agreement cannot exceed three (3) years.
  • No obligation to opt for financing via banks or other financial institutions. Client reserves the right to do so should the need arise.
  • Should the client resort to financing, security can be provided by a mortgage registered over the yacht, by a Deed of Covenants collateral thereto, as well as a pledge of shares in the owning company in favour of the bank or financial institution.
  • Yacht must be present in Malta at the beginning of the Lease upon execution of the Lease agreement (commencement of services) and also upon termination of the Lease agreement
  • Upon expiry of the lease, once VAT on all installments and all payments thereto have been paid, the Malta VAT Department will issue an EU-wide VAT-paid certificate.
  • Lessor must be a Maltese person, natural or juridical. 
  • Lessee may be a foreigner, natural or judicial.
  • No obligation to register one's yacht under the Malta flag.  
  • The yacht may be new or used

 

The effective VAT rate is directly dependent on the type and length of the yacht. To this effect the VAT Department has issued guidelines illustrating the various VAT percentages set according to the length of the craft and its means of propulsion (power or sailing). Please feel free to forward the details of your yacht so that we may advise you accordingly.

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