Since a couple of years, Malta-display of flags, especially for bigger yachts, is on the list of preferences. Not only because of the Premium flag and special range of Services of this maritime nation, but also due to attractiveVAT- advantages for the owners, who are looking for a solution for an EU-taxed yacht. A Special Malta-Service-Lease-Scheme with a late purchase option is developed in Malta, which provides areduced VAT-rate- at the best 5.4%- for yachts
which are leased and purchased later and is legally approved in Malta by the government authorities. Based on this offer, a full-fledgedregistration industry has developed. Agencies and offices offer this model like a standard-product for everyone, without having the information or knowledge that the model is designed only from the view of Malta-rights and does not work at all for Non-Malta-EU-citizens due to the EU regulations or regulations of the country of residence with tax and customs. The can certainly lead to tax-tsunami.
“I attended a Superyacht-conference in Malta in March 2016 and addressed the problems among the experts. The co-founders of the model, who were astonished themselves, remarked that advice be given only in the view of Malta and apart from that it is up to the owners and customers, to check whether the construct is legal and tax-free in the Country of residence or its effects”, commented Prof. Dr. Christoph Ph. Schließmann of Der-Yacht-Anwalt [The Yacht Attorney] in Frankfurt am Main. “In most of the cases which I know, the client is however already ignorant of the international legal situation about the interface of the legal system and is not even made aware of the risks in the home country. Somewhere in small print here and there, by the way of attempting a disclaimer, a note is to be found that only a consultancy and design from a Maltese view shall be made. However, at the time of sale, the customer is sold a single-sidedfunctioning and so-called problem-free savings scheme. Afterwards,he is left to suffer on his own. “
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 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 throughout the entire term of ca. 2-2.5 years from establishment to liquidation.
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