SHIPPING

 

In terms of the Merchant Shipping (Taxation and Other Matters Relating To Shipping Organisations) Regulations, Income from shipping activities derived by a licensed shipping organisation is exempt from income tax. In terms of Maltese law, an annual tonnage tax is paid instead of tax on income.

 

Any income derived by a ship manager from ship management activities shall be deemed to be income derived from shipping activities and shall be exempt from tax under the Income Tax Act provided that:

 

·   Company qualify as a “shipping organization” and must obtain a license from the relevant Authority;

·      Ship manager has paid to the Registrar-General an annual tonnage tax equivalent to 25% of the annual tonnage tax payable in respect of the particular ship;

·      At least 2/3rds of the tonnage of the ships to which the ship manager provides ship management activities is managed from the territory of the Community;

·         The tonnage of the ships in respect of which the ship manager provides ship management activities meets any of the following conditions:

o   at least 60% of the said tonnage is registered under a Community flag, or

o   the percentage of the said tonnage which is Community-flagged immediately after ship manager begins to operate an additional ship is not less than the percentage of the ship manager’s tonnage which was Community-flagged on the later of 11 June 2009 or one year from the day on which the ship manager began to operate; or

o   the percentage of the said tonnage which is Community-flagged has not decreased over a period of three years or such lessor period in which the ship manager was in existence if the said whip manager was in existence for a period of less than three years

 

 

VAT TREATMENT OF YACHT LEASING

 

A leasing agreement of a pleasure boat is an agreement whereby the lessor (owner of a boat) contracts the use of the boat to the lessee (person who leases the boat) in return for a consideration. At the end of the lease period, the lessee may opt to purchase the boat at a percentage of the original price.

 

For VAT purposes, the lease of the boat is a supply of services with the right of deduction of input VAT by the lessor, where the right of input VAT applies. This supply of services is taxable according to the use of the boat, attributed within the territorial waters of the European Union (EU), provided that the lessor is a Maltese company which is leasing the boat to any Maltese or non-Maltese person or company.

 

The standard rate of VAT of 18% is applied on the established percentage of the lease, deemed to be related to the use of the boat in EU territorial waters. The table below indicates the established percentage portions according to the type of boat:

 

 

Type of boat

% of lease taking place in the EU

 

Computation of VAT

Sailing boats or motor boats over 24 metres in length

30%

30% of consideration * 18%

Sailing boats between 20.01 to 24 metres in length

40%

40% of consideration * 18%

Motor boats between 16.01 to 24 metres in length

40%

40% of consideration * 18%

Sailing boats between 10.01 to 20 metres in length

50%

50% of consideration * 18%

Motor boats between 12.01 to 16 metres in length

50%

50% of consideration * 18%

Sailing boats up to 10 metres in length

60%

60% of consideration * 18%

Motor boats between 7.51 metres to 12 metres in length

(if registered in the commercial register)

60%

60% of consideration * 18%

Motor boats up to 7.5 metres in length (if registered in the

commercial register)

90%

90% of consideration * 18%

Boat permitted to sail in protected waters only

100%

100% of consideration * 18%

 

 

 

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Any reliance you place on such information is therefore strictly at your own risk.

Contact Details

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Website: www.trekmalta.com

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Block A3, Level 12,
Triq l- Arkata, Paola,
PLA 1211, Malta