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Yacht Leasing VAT Scheme

According to guidelines published by the Maltese VAT Department dealing with the VAT treatment of yacht leasing, the supply of leasing services is taxable according to the extent of use of the yacht within EU territorial waters, provided that the lessor is a Maltese company. 

The lease of the Yacht is a supply of services with the right of deduction of input VAT, where such right applies. The VAT liability therefore arises in the hands of the lessee. In view of the practical difficulties which arise in determining the period that the craft spends inside and outside EU territorial waters, the guidelines establish an estimated percentage portion of the lease based on the time that the craft is presumed to be used within EU territorial waters. These presumptions are tied up to the length of the vessel and its means of propulsion (power or sailing). Yachts over 24m 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 these VAT-efficient leasing structures.