The new guidelines relate to the lease of pleasure yachts by a lessor to a lessee, also clarifying the manner in which VAT is levied on the leasing of pleasure yachts at each chargeable event.
The new rules issued by the Commissioner for Revenue are still based on Article 59A of the VAT Directive. take into consideration the place of supply of the leasing of pleasure yachts and the overall VAT incurred on the leasing of such yacht which may be reduced substantially depending on the use and enjoyment of the yacht when a yacht is supplied by a Lessor to a Lessee in Malta. No Maltese VAT is applied when the lessee makes use of the pleasure yacht outside of European territorial waters.
An initial ratio calculation will be used for the first or first and second annual tax period depending on the start of the lease. The Guidelines stress the importance that the lessor maintains adequate records which includes documentary evidence and/or technical data to determine the ‘actual’ effective use and enjoyment ratio throughout the term of the lease. Furthermore, an adjustment of the difference will be made in the next VAT return.
The New VAT Guidelines impose specific obligations that need to be fulfilled for the guidelines to apply:
The 2019 Guidelines may be accessed here for ease of reference.
Zeta provides advisory services and assistance to individuals and entities who are looking at setting up corporate structures as well as to register pleasure or commercial yachts under the Malta flag.
Do get in touch with us and we will be happy to assist you further.