We have an extensive experience in ship management for Malta with excellent on-site representation and design individual concepts covering the private or commercial operation of a yacht under this flag.
For some years, the preference for a Maltese flag was for larger yachts. Not only because of the premium flag and the special services offered by this maritime nation, but also because of the value added tax advantages for owners who are looking for a solution for an EU-taxed yacht.
For over 10 years, Malta had flown under the EU's perceptual radar system with a VAT Lease Scheme allowed under its own law to reach the "VAT PAID Status" quickly and attractively - at best 5.4% after only a short charter time - and attracted many large yachts.
This "unique competitive advantage" that Malta has created is irretrievably over. The Malta Lease Scheme has been in force since August 2018 and will no longer be in force. Anyone who has received a confirmation of acceptance of his leasing application by that date from the Maltese Ministry of Finance, whose yacht is still being treated under the old conditions and will also receive the coveted "VAT PAID" in 2019. All others must consider what is the best alternative solution for them or await the announced new Malta lease offer, which, however, is in line with the old EU and will in most cases no longer be economically viable.
The old Malta Yacht Leasing Scheme has come to an end since August 2018, following an infringement by the European Commission.
MALTA publishes new VAT guidelines for usage leasing - no more payment leasing than in the past.
An EU notification and the incompatibility of the Malta Yacht Lease Scheme with EU law (ECGH/Mercedes Case) ended in August 2018. Malta's national law had for years classified de facto financing leasing as operational leasing.
The new leasing offer from Malta - published February 29, 2019 - has nothing in common with the old one! It is no longer a VAT "tax turbo" where after - mostly - 12 months of payment lease the "VAT-PAID" is issued to the yacht, but is a purely operational leasing, whereby the yacht remains VAT-FREE and the owner/user pays VAT only on the use of the yacht in EU waters according to certain quota formulae. The yacht can be sold EX VAT.
The new Malta Lease model requires much more consultancy, management and planning than the old lease scheme, because everything has to be individually designed and built on a case-by-case basis. The day-to-day administration also carries a lot more work than the previous standard scheme, especially for those customers where we also provide services for directors, since the manager of the lessor/lessors is responsible for the VAT liability at the end of the day when a tax assessment is issued and VAT is accepted and due.
In addition, especially in the new lease, a legal and tax-secure structure based on international law must be established. It is not the Malta Lease in its national version that decides on its legal compatibility with the UBO's host country law, but the international and national rules applicable to it in its country of residence.
For German UBOs, for example, the often practiced 1-Ltd. or 2-Parallel-Ldt are often practiced in Malta. Solutions as a structure do not comply with the law.
The model is therefore suitable for yachts from 24 - 28 meters with real use of the voyage. For sun lovers on the pier or in bays hardly!
Through fundamental legal changes on EU-level and ratification in the EU-countries in the last two years as well as the recent decisions of BFH, the Standard-Malta-Leasing-Model functions specially for yachts above 24 m only for Malta-citizens and leads to VAT related problems in the country of residence (including yachtleasing in case of yachts above 24 m and longer than 90 days at country of residence of the leaser), corporate tax, income tax, settlement tax and withholding tax. Risks of the hidden profit distribution are also added.
The Problem is not the Malta-Lease-Model per se, but its legal usefor the Non-Malta-citizens. We have worked out a solution in an international, cross-border team afterseveral weeks: to make Malta-Leasing-offer further possible in terms of law and tax for EU-citizens who are Non-Maltese. The solution reached is not a modification in the legal Malta-Yacht-Leasing-Model-offer, rather a necessarily and fundamentally new way of its legal use and delivery- and is individually separated for every event according to the laws prescribed in the country of residence of UBOs. Furthermore, it is important to consider the current changes. There is no scheme, even though it will gladly be sold in Malta.
I can not stress it enough: Malta leasing - till 2018 and especially the new version 2019- is not a product you can literally buy off a shelf and everything is fine. On the contrary, such a shelf product can not stand an audit if it is not designed according to the tax rules of the country of residence and the tax situation of the owner.
We shall guide you with our Malta-solution legally in Full-Service.
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Ausgabe 1/2014 Die Premiumflagge mit dem weißen Kreuz
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Ausgabe 4/2014 Zwischen 0 und 27 Prozent - Serie "Effizienter Yachtbetrieb" Teil 2
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