When a yacht is imported in the EU for commercial purposes, it must undergo relative VAT and customs procedures in order to subsequently be imported into the EU. On the other hand, for a yacht to be placed in the EU indefinitely it would need to be registered in an EU member state. In that case, a yacht registration in Malta would be a fiscally advantageous alternative. Thus, yachts intended for commercial use may be imported into the EU via Malta for the relevant VAT and customs procedures to be undertaken. This would then allow the yacht to be chartered out and sail freely within EU waters.
The VAT rate on the importation of yachts for commercial use in Malta is 18%, however a VAT deferment is available which would replace the need to pay the 18% VAT.
It is also possible for owners of a vessel flying a non-EU flag, who are non-EU residents and who intend to use their private yachts temporarily in EU waters, to place their yacht under temporary importation via Malta. This procedure requires the yacht in question to call at Malta and be subjected to temporary importation with the Maltese customs authority. The owner would subsequently be able to use his yacht freely in EU waters and therefore the yacht can move from one member state to another with no further formalities for a period of 18 months.
Following discussions held with local authorities, a number of new procedures for the importation of yachts in Malta have been confirmed. More specifically, the procedures are aimed at the deferment of VAT on the importation of commercial yachts. The confirmed procedures are listed below:
- Deferment of VAT on the importation of commercial yachts by Maltese owning entities having a Maltese VAT registration without the requirement of the importing entity setting up a bank guarantee;
- Deferment of VAT on importation of commercial yachts by EU owning entities having a Maltese VAT registration provided that the company appoints a VAT representative in Malta in terms of Article 66(2)(b) of the VAT Act1 without the requirement of the importing entity setting up a bank guarantee;
- Deferment of VAT on the importation of commercial yachts by non-EU owning entities on provision by the importing entity of a bank guarantee in an amount equivalent to VAT on 0.75% of the value of the yacht which would be capped at 1 million EUR.
Footnotes
1 Chapter 406 of the Laws of Malta – Value Added Tax Act
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