Yacht Leasing Structures

We assist and advice clients on the formation, documentation and setting up of yacht leasing arrangements of pleasure yachts to benefit from various incentives emanating from the CFR Guidelines on Item 12 of Part Two of the Third Schedule to the VAT Act pursuant to which the Commissioner shall only consider the place of supply of the hiring of pleasure yachts, if situated within Malta, as being situated outside EU territorial waters if the actual effective use and enjoyment of the services takes place outside EU territorial waters and provided the conditions referred to in the Guidelines are met.

Lessors benefiting from the “use and enjoyment” provisions would be entitled to charge the standard VAT rate on leasing fees commensurate with the actual time that the yacht spends within EU territorial waters only, rather than charge the standard Maltese VAT rate during the full lease period which would otherwise be applicable in the case of long term leases. The lessor may also be entitled to adjust, and defer payment of VAT to the CFR, if it proves by means of acceptable and recognized documentation that the yacht has been used in non-EU territorial waters.