The new Guidelines, although still based on Article 59A of the VAT Directive, establish the manner in which the use and enjoyment of such leased pleasure yachts is to be treated for VAT purposes.

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Article 59A of the VAT Directive allows Member States to tax the use and enjoyment of services, which would therefore include the lease of a pleasure yacht, for the time that the service is effectively used and enjoyed within European territorial waters.

As per the 2019 guidelines, Maltese VAT will be charged on the portion of the lease covering the effective use and enjoyment of the pleasure yacht within EU territorial waters. No VAT will be chargeable on the portion of the lease which covers the use and enjoyment of the pleasure yacht within non-EU territorial waters or international waters.

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During the lease period, the Lessor must maintain adequate records, including documentary evidence and technological data, to determine the actual effective use and enjoyment of the pleasure yacht by the Lessee within and outside EU territorial waters.

In order to benefit from the 2019 Guidelines, such Guidelines must be applied within the context of setting up of operating leases.

The 2019 Guidelines may be accessed through the Commissioner for Revenue website.

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Yachting Partners Malta Ltd  will take care of all the formalities on your behalf including the Flag Registration, company setup, formal application with all relevant authorities and necessary accounting as we act as your sole point of contact making the whole process very simple.

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For more information on the advantages of registering a vessel in Malta drop us an email or call us on +356 21252727