Reduced VAT rate for short-term yacht charters
The yachting industry in Malta is an ever-growing sector. At present, there are over 1,000 yachts above 24 metres in length registered under the Malta flag. Several yachting companies have opted to establish themselves in Malta due to the various benefits that may be enjoyed as well as the facilities available on the island.
As of 1 January 2024, a reduced VAT rate of 12% shall apply to the short-term chartering of pleasure yachts commencing from Malta. This comes as a result of Legal Notice 231 of 2023, issued on the 6th October 2023, which transposes EU Council Directive 2022/542. When chartering a yacht, VAT shall be due on the charter fee in accordance with the VAT rate of the jurisdiction from where the charter commences. By means of the abovementioned legal notice, charters commencing from Malta shall, subject to the satisfaction of certain conditions, be subject to a reduced VAT rate of 12%, making it one of the lowest VAT rates, applicable to charters, in the EU.
For further information feel free to contact Dr Andrew Massa from our yachting team on andrew.massa@dfadvocates.com