Register Your Yacht in Malta

    register your yacht in malta

    Imagine cruising the Mediterranean Sea and visiting the scenic little settlements along foreign coasts. It is probably the dream of all yacht lovers.

    When it comes to Yacht registration, Malta is one of the best countries to register a yacht in Europe. The Malta Registry of ships is the largest register in the whole of Europe, and one of the largest in the world. After acquiring your yacht, the next step is to register it under the jurisdiction of your choice. Depending on your particular needs, the chosen location will need to meet those needs.

    It is in your best interest to choose a jurisdiction which is highly accessible, fiscally competitive, and reputable. Malta’s long maritime tradition and culture have led to the country becoming a well-established and prominent ship register.

    Directives and IMO (International Maritime Organisation) Conventions have made the Malta Shipping Registry the sixth largest maritime register in the world. It is the largest merchant flag in the European Union.

    Malta offers a distinctive and complete range of maritime services and facilities, including one of the busiest Free-port areas in the Mediterranean, major oil bunkering facilities, and a modern cruise passenger terminal.

    Malta is also on the White List of the Paris MoU (Memorandum of Understanding). All this further consolidates Malta’s historic maritime tradition and enhances Malta’s position as an international ship register.

    The aim here, is simple – to provide as much information as practically possible to help you understand the top 5 Reasons To Register Your Yacht in Malta.

    #1 Registration of your Yacht under the Maltese Flag

    Registration and yearly maintenance of the registration are obtained at minimum costs.

    The provisional registration of a yacht can be obtained within twenty-four hours after the filing of the necessary documents. The permanent registration takes place within six months from the provisional registration upon all documentation being received by the Authority.

    The set-up and registration of a company to own the yacht is also inexpensive.

    The advantages of reduced personal liability and the confidentiality offered by the ownership of a yacht through a company, is an added attraction to owners.

    The transfer of shares within the company owning the yacht may also be exempt from taxation, and a Maltese company owning a Maltese registered yacht may not be taxed on the sale and mortgage of such yacht.

    yacht registration in malta

    #2 Yacht Registration Procedures In Malta

    The Malta Commercial Yacht Code was launched in 2006 and was developed mostly based on industry-established standards.

    But unlike other codes, it brings together the requirements for both yachts below and over 24 meters. The code has been proven to be successful and has gained acceptance and international recognition within the industry.

    Malta issued a revision of the code in 2010. The revised code serves the needs of the larger yacht industry better and aims to optimise the regulatory regime to the particular needs, demands and technologies of this market, in conformity with recent safety and international regulations and standards.

    Yachts can be built to the standard of a commercial yacht but be registered as a pleasure yacht. This enables the yacht to be in conformity to higher quality and safety standards but to be operated on a private basis.

    Private yachts being built to this standard are also known to fetch a higher resale value in the second-hand market. As one of the largest flags in the world, Malta imposes uncompromising standards that have earned it such a golden reputation in the maritime sphere.

    The procedure for yacht registration in Malta is straightforward and well designed. The registration and discharging of mortgages which are necessary when trying to obtain financing are also not complex. If all the accurate documentation is available at registration, the process will usually take just two working days.

    Malta has created a system whereby ownership of the yacht can pass onto the buyer at a reduced VAT rate. A provisional registration that lasts up to six months is likely to enable the full documentation (such as a deletion certificate from the previous register) to be completed.

    If all the documents are provided, a permanent registration can be in place with the Maltese Ship Registrar. This six months term of provisional registration may be extended once only for a further period of six months.

    Learn More about Registration of yachts & features of the Commercial Code


    We provide consultancy through the various stages involved in the ownership of a Yacht: Finance, Purchase, and Registration.
     
    Contact Us

     

    yacht registration malta tax

    #3 Financial Benefits of Maltese Yacht Registration

    As previously mentioned, Malta is one of the best places to register your sailboat. Not only due to the fact that the procedure for registration is less complex, but registering it under the Maltese jurisdiction can yield many financial benefits as well.

    Companies running commercial yachts are exempt from income tax on any income generated by the operation of their yachts. The exemption will apply provided an annual transport Malta tonnage tax, based on the gross tonnage of the commercial yacht, and the annual registration fee is duly paid.

    Additionally, commercial yachts operating on the high seas and carrying paying passengers (lessee is using the yacht for economic activity) are exempt from VAT on any supplies, including maintenance costs, to the yacht, and no VAT is chargeable on revenue from chartering operations.

    If a commercial yacht does not qualify for the exemption from income tax, they may take advantage of the low effective income tax rate of 5%. Any foreign income tax suffered on such a yacht’s commercial operations would be available as a credit against the Maltese income tax so that the effective Maltese tax could even be reduced to 0%.

    Nexia BT can provide a wide range of services relating to the planning of international tailor-made tax efficient structures, the legal and tax advice.

    Get in Touch 


    #4 VAT Considerations

    As a rule, yachts used within the EU waters, and all yachts owned by EU citizens must be VAT paid and must have a VAT paid certificate.

    Malta is one of the EU jurisdictions offering substantial VAT reductions by means of lease structures and offers benefits with regards to this structure.

    The law does not impose that the lessor and the lessee must have a different beneficial owner, or that the former must be a financial institution.

    In accordance with Maltese law, for the purpose of VAT, the lease of the yacht is considered a supply of services with the right of deduction of input VAT by the lessor, where such right applies.

    This supply of services is taxable according to the use of the craft, attributed within the territorial waters of the EU, provided that the lessor is a Maltese company (including a commercial bank) leasing the craft to any Maltese or non-Maltese person or company.

    Minimising VAT Implications

    The estimated percentage portion of the lease is based on the time that the craft is used within the EU territorial waters. These percentages are set according to the length of the craft and its means of propulsion (depending on the size and propulsion of the craft).

    The standard rate of VAT of 18% is only applied to the established percentage of the lease, deemed to be related to the use of the craft in EU territorial waters. The lessor is expected to make a profit from the leasing agreement over and above the value of the boat, with the purchase value at the end of the lease agreement subject to the standard rate of VAT at 18%.

    To benefit from the Maltese VAT lease structure, the boat must arrive in Malta, possibly at the beginning and end of the lease agreement. A financial leasing agreement is drawn up between a Maltese company and any Maltese or foreign entity. Before the setup, approval is sought in writing from the Commissioner of VAT, who is to confirm the rate applicable according to the use in EU territorial waters, as well as the acceptability of the value of the yacht, as declared. For this purpose, a valuation certificate of the craft is submitted with the application for approval.

    Payments are divided into two phases - an initial contribution is paid by the lessee to the lessor amounting to a substantial part of the value of the craft. Subsequently, lease installments are paid every month by the lessee to the lessor, and the law requires that the lease agreement should not exceed 36 months.

    If the lessee opts to purchase the craft at the end of the lease, a VAT paid certificate is issued to the lessee provided that all VAT due has been paid.


    Type of craft subject to VAT
    % of lease rate of VAT
    Effective

    Sailing boats or motor boats over 24m in length

    30

    5.4%

    Sailing boats between 20.01 to 24m in length

    40

    7.2%

    Motorboats between 16.01 to 24m in length

    40

    7.2%

    Sailing boats between 10.01 to 20m in length

    50

    9.0%

    Motorboats between 12.01 to 16m in length

    50

    9.0%

    Sailing boats up to 10 m in length

    60

    10.8%

    Motorboats between 7.51 to 12m in length (if registered in the commercial register)

    60

    10.8%

    Motorboats up to 7.5 m in length (if registered in the commercial register)

    90

    16.2%

    Craft permitted to sail in protected waters only

    100

    18%


    malta yacht chartering

    #5 Short-term Chartering of Yachts in Malta

    In the case of a short-term charter of a pleasure boat, the overall VAT incurred may be reduced substantially depending on the size and means of propulsion of the yacht as detailed in the Short-Term Chartering Guidelines issued by the Maltese VAT Department.

    A short-term charter of a pleasure yacht is an agreement whereby the yacht owner/operator contracts the use of the boat for consideration with a crew or on a bareboat basis. The term of the charter cannot exceed 90 days.

    For VAT purposes, the short-term charter of a yacht to be used for leisure purposes is a supply of a service which is taxable at the standard rate of VAT.

    The place of taxation is the place where the yacht is physically placed at the disposal of the customer. Subject to certain conditions, this supply is taxed according to the use of the boat insofar as that portion of its use within the territorial waters of the European Union.


    At Nexia BT, we are able to provide a comprehensive service to yacht owners and managers including short-term chartering of yachts.
     
    Contact Us

     

    Why choose Nexia BT?

    Established by Brian Tonna, managing partner, Nexia BT is a corporate and private client advisory, audit, accounting and tax firm. Our clients are local and international financial and other institutions, SMEs, high-net-worth-individuals, the public sector and high-end organisations.

    As a reputable organisation of over 25 years standing and forming part of a worldwide network of independent business advisors, consultants, auditors and accounting firms present in over 115 countries, we are optimally positioned to offer global expertise.

    Along these years, we have built client loyalty around a credible reputation for delivering results whilst working to the highest professional standards.

    Nexia BT’s strength lies in the technically competent staff with experience across a varied range of industry sectors. We deliver solutions to our clients through a high calibre customised service reflected in the professional work approach and ethics of our staff and driven by our ethos ’Closer to you’. With the backing of this business approach, we confidently present you Nexia BT as your trustworthy, dependable and reliable partner in Malta.

    Get in Touch

    file-2-1-1Karl Cini

    Partner 
    Tax and International Client Services

    karl.cini@nexiabt.com
    View Profile