Malta VAT on Yachts

The EU Value Added Tax (VAT) is a form of consumption tax system which applies all throughout all the member states of the European Union. VAT has to be paid on any yacht sailing EU waters unless it falls under the temporary importation relief. The moment at which the VAT has to be paid depends mostly on the ownership of the vessel. Once the VAT is paid by an EU individual or body corporate in one of the EU countries, a yacht can roam around freely throughout all the EU member states. In Malta VAT on Yachts can be mitigated through a system which can reduce the VAT payable to an effective rate of 5.4% depending on the yacht.

Temporary Relief

If a yacht is owned and used by a non EU person but sailed in EU waters a temporary relief is available. Should the owner choose to sail the yacht in EU waters indefinitely, the yacht VAT shall be paid for the purpose of importing the yacht to the EU. 

Reducing the Malta VAT on yachts

In Malta, VAT on yachts can be reduced by setting up a Maltese company, which firstly must acquire the yacht and lease it to a third party before finally selling the yacht. The exact rate of VAT that has to be paid depends on the propulsion and length of the yacht. Through this system the owners of the yacht are allowed to sail freely within the EU waters while also benefitting from the savings on the yacht VAT that has to be paid on the value of their yacht.

Effective rates

The effective rates for Malta VAT on yachts are applicable as follows:

  • Sailing boats or motor boats over 24 metres in length  - 5.4%
  • Sailing boats between 20.01 to 24 metres in length - 7.2%
  • Motor boats between 16.01 to 24 metres in length - 7.2%
  • Sailing boats between 10.01 to 20 metres in length - 9%
  • Motor boats between 12.01 to 16 metres in length - 9%
  • Sailing boats up to 10 metres in length - 10.8%
  • Motor boats between 7.51 to 12 metres in length (if registered in the commercial register) - 10.8%
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