Yachting in Malta

Maritime

Malta enjoys a legacy of maritime history which over the years developed into a body of law that is conducive to today’s business needs. Nowadays the Merchant Flag of Malta is flown by a multitude of merchant vessels as their ensign such that the Our nations ship registration ledger is amongst the ten leading nations worldwide.

 

Apart from the merchant market, the boat and yachting industry is given equal importance by both government and investors. So much so that Malta is a reputable location for its yacht marinas, yacht yards and other ancillary services required to maintain this expanding economic sector. Fiscal policies have also been enacted to establish a win-win situation between investors and service providers.

 

Ship Registration Requisites:

 

• Presentation of survey, tonnage and convention certification issued on behalf of the Malta government by a recognised organisation;

 

• Manning and certification of seafarers in accordance to the Merchant Shipping Act, ancillary regulations and the STCW 78 Convention;

 

• Mortgages of the vessel such as registration, transfer and discharges are to be disclosed to the Registrar;

 

• Ships under construction are to be built under the supervision of a recognised organisation and declaration of ownership can only be instituted when either construction or delivery has been effected;

 

• Yachts carrying twelve (12) or more passengers and are not in the business of cargo transhipment are recommended to register under an alternative scheme – Registration of Commercial Yachts;

 

• Malta is a signatory of all major international maritime conventions; and

 

• Bareboat charter registration is also permissible but specific regulations and laws apply.

 

Ship registration procedure

 

The Malta Transport Authority under its maritime section adopts a two stage process. A temporary registration for six months is granted upon the presentation and completion of a specified procedure. Within the six month temporary registration period further documents are to be submitted to conclude the process.

 

1.0 - Documents required for provisional registration

 

• A application of registration duly filled and presented by the owner or authorised representative;

 

• Proof of qualification to own a Maltese ship or else in the case of Non-Maltese the appointment of a resident agent is required;

 

• Where applicable the ship’s International Tonnage Certificate is required;

 

• Declaration of ownership by the owner or authorised representative is made in the presence of the Registrar;

 

• Seaworthiness evidence is presented and thoroughly vetted;

 

• In particular cases the Authority may request additional information and evidence, such as but not limited to, for a classification society to issue the ship’s and company statutory certificates;

 

• Declaration of their Maritime Labour Compliance (DMLC) – Part 1;

 

• Where applicable, the Minimum Safe Manning Certificate;

 

• Payment of initial registration fees and annual tonnage tax and

 

• Application for the Ship Radio Station License.

  

 2.0 - Documents to be submitted during provisional registration

  

• Where a change of ownership of a vessel occurred either a bill of sale, transfer document or a builder’s certificate is to be presented to the competent authority;

 

• Where applicable, cancellation of previous registration certificates are to be presented to the competent authority;

 

• Solas ships are required to present the last Continuous Synopsis Record issued by the Administration where the ship was documented;

 

• Surveyance records namely the certificate of Survey and the International Tonnage Certificate are to be presented to the competent authority; and

 

• Evidence that the vessel has been marked in accordance with law.

 

The outcome of this process could be twofold, that is:

 

• If the requirements are not met the competent authority will issue a non-operational certificate of registry; or

 

• If all requirements are adhered to a certificate of Malta registry will be issued and will come up for renewal on a yearly basis.

 

Yachting tax schemes in Malta

 

Enjoy the allure of the seven seas when leasing a yacht in Malta.

 

Back in 2005 the Maltese Value Added Tax Department (VAT) issued guidelines regarding VAT treatment of yacht leasing in Malta. The scheme ensures that the rightful and lawful consumption tax is paid and navigation within European charted waters remains unrestricted.

 

The leasing process:

• A Maltese company a third party, being an individual or an undertaking agree to enter a lease agreement for the services of a yacht;

 

• In return for the lease of the yacht the third party is obliged to pay a consideration for the use of the asset, the yacht.

 

• This business arrangement constitutes a business service, therefore is subject to Value Added Tax at the rate of eighteen per cent (18%);

 

• However, since the yacht is expected to be sail in and outside EU territorial waters, VAT is only applicable to its use within the European Union.

Therefore the following VAT schedule will come into effect:

 

Type of craft	Length of craft in metres	Percentage (%) of lease taking place in the EU	Vat computation
Column A	Column B	Column C
Sailing or motor boat	Over 24 metres	30	Column C x 18%
Sailing boat	Between 20.01 to 24 metres	40	Column C x 18%
Motor boat	Between 16.01 to 24 metres	40	Column C x 18%
Sailing boat	Between 10.01 to 20 metres	50	Column C x 18%
Motor boat	Between 12.01 to 16 metres	50	Column C x 18%
Sailing boat	Up to 10 metres	60	Column C x 18%
Motor boats*	Between 7.51 to 12 metres	60	Column C x 18%
Motor boats*	Up to 7.5 metres	90	Column C x 18%
Boat permitted to sail in protected waters only	Not Applicable	100	Column C x 18%
* if registered in commercial register

 

At the end of the lease agreement the lessee can exercise his or her right to purchase the yacht.

 

Requirements to apply these guidelines:

 

• The leasing agreement has to be instituted between a Maltese company and a Maltese, foreign person or company;

 

• The lease agreement must be for a period not exceeding 36 months and instalments must be on a monthly basis; and

 

• Approval shall be sought in writing from the Commissioner of VAT and each application will be considered on its own merits and certain conditions may be applied. The Commissioner of VAT may also request the lessor to submit details regarding the use of boat.

 

For further information you are kindly requested to contact:

 

Key Contacts:

 

Alex Agius

Managing Director

 

Marica Bonello

Senior Auditor

 

Lamima Consultancy Services Ltd

Email:    info@lamima.com.mt

Tel:       +356 21423059