VAT Yacht Lease

The Maltese Commissioner for Revenue has published Guidelines regarding the effective use and enjoyment by a lessee of a pleasure boat within and outside EU territorial waters where such pleasure boat is contracted by the owner thereof to a lessee for advance lease payments in virtue of a lease agreement. Yacht owners who are in a position to demonstrate usage of the yacht subject to a lease outside of EU waters will be able to benefit from an overall reduced rate of VAT calculated on the percentage of usage of the yacht within as well as outside of EU waters. Please note the Guidelines on the following link:

https://cfr.gov.mt/en/vat/guidelines_to_certain_VAT_Procedures/Documents/Guidelines%20re%20Item%2012,%20Part%20Two,%20Third%20Schedule%20to%20the%20VAT%20Act%20-%20280219.docx.pdf

In terms of the Guidelines, the VAT rate will be worked out according to the actual usage of the yacht in and outside EU waters. If it is the yacht owner’s intention to sail in international (non-EU) waters frequently, then the owner may be interested in entering a yacht lease pursuant to the said Guidelines. The estimated percentage of the time spent outside EU waters would be required together with details of the yacht including the make, size, year of built, port where it will be/is berthed, flag and value of yacht for us to guide the owner in terms of the application of the Guidelines.