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02 September 2020
Malta has always been at the forefront of offering solid, reliable solutions to yacht owners depending on their individual requirements and the intended use of their yacht. The first half of 2020 has seen the introduction of updated rules affecting operating leases and streamlined importation procedures, offering owners the possibility of availing themselves of a number of solutions and procedures catering to their individual requirements. Given the delay in the season due to the COVID-19 pandemic, this article highlights these developments for owners that are taking delivery of or importing their yachts over the coming months.
For many years Malta has offered an efficient and attractive procedure for the importation of commercial yachts that are intended to be brought into free circulation within the European Union so as to enable them to carry out their chartering season in the Mediterranean. The introduction of the following measures earlier in 2020 was intended to further strengthen the procedure governing the importation of commercial yachts in Malta:
On 12 March 2020 the commissioner for inland revenue published revised guidelines regarding the place of supply of the hiring of pleasure yachts. The guidelines establish the manner in which the use and enjoyment of such pleasure yachts is to be treated for VAT purposes.
While the general principle is that full taxation in Malta applies where the place of supply of the service is determined to be Malta, the guidelines provide for a method of adjustment based on the actual effective use and enjoyment of a pleasure yacht in and outside EU waters. The revised guidelines establish that this is to be calculated by reference to the period of time when the pleasure yacht is used and enjoyed outside EU territorial waters.
For the purpose of applying the guidelines, the lessee must provide the lessor with documentary or technological data to determine the actual effective use and enjoyment by the lessee of the pleasure yacht in and outside EU territorial waters during the lease period.
The guidelines may be used within the context of operating leases that are set up under Maltese law.
Malta has built a formidable reputation in catering to owners' needs while constantly taking into account industry practice and legal developments. This has led to Malta being a go-to jurisdiction for the setting up of operating leases. Such operating leases are formulated in accordance with best practices to ensure compliance with EU interpretations and European Court of Justice judgments and would generally comprise the following principles:
For further information on this topic please contact Alison Vassallo at Fenech & Fenech Advocates by telephone (+356 2124 1232) or email (email@example.com).The Fenech & Fenech website can be accessed at www.fenechlaw.com.
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