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VAT Treatment Short-Term Yacht Charter

For VAT purposes, the short-term (less than 90 days) charter of a yacht to be used for leisure purposes is a supply of a service which is taxable at the standard rate of VAT.

The place of taxation is the place where the yacht would actually be placed at the disposal of the customer (Malta). Subject to certain conditions, the taxation of this supply would be limited to that portion of the use of the yacht within the territorial waters of the EU. Since it is very difficult to physically trail the movements of a yacht in order to determine the period during which the yacht is used within the territorial waters of the EU and the period during which it is used outside the EU, the Maltese Ministry of Finance has issued guidelines set out to establish the estimated percentage portion of the charter, based on the time that the yacht is made use of within the territorial waters of the EU. These percentages are set according to the length of the yacht and its means of propulsion (power or sailing). Yachts over 24m LOA are subject to an effective VAT rate of 5 . 4 %

The above scheme is subject to conditions and Alliance Yachting Company offers yacht owners guidance in order to make use of this VAT treatment of short term yacht chartering.