Yachts imported in the European Union for commercial purposes need to undergo relative VAT and customs procedures to subsequently be imported in the European Union with the release of the relative import documentation and thus bringing the yacht into free circulation.
Owners choosing Malta to import the yacht will need to call at a port in Malta to undergo the relative VAT and customs procedures applicable.
Malta used to provide for a deferment on VAT for Maltese and EU owning entities, against a bank guarantee issued in favour of the VAT Department, on assets, in this case yachts, being imported into Malta for commercial purposes. The bank guarantee was a requirement to ensure that the yacht imported into Malta is used for commercial matters of the owning entity. Should the VAT Department determine that the owning entity be in breach of such requirement, and never intended to use the yacht for the entity's commercial purposes, the bank guarantee will thus be released in favour of the VAT Department.
Nevertheless, on the 20th of March 2020, local authorities have amended the importation and deferral of VAT procedures of yachts being imported for commercial purposes into Malta as follows:
- Maltese Owning Entities: A deferment of VAT on the importation of yachts, with the intention to be used for commercial purposes, by Maltese owning entities having a Maltese VAT registration will be provided, without the need for such entity to set-up a bank guarantee in favour of the VAT Department.
- EU Owning Entities: A deferment of VAT on the importation of yachts, with the intention to be used for commercial purposes, by EU owning entities having acquired a Maltese VAT registration, provided that the company appoints a VAT representative in Malta in terms of Article 66(2)(b) of the VAT Act, will be provided, without the need for such to set-up a bank guarantee in favour of the VAT Department.
- Non-EU Owning Entities: A deferment of VAT on the importation of yachts, with the intention to be used for commercial purposes, by non-EU owning entities, will be provided once a bank guarantee in favour of the VAT Department is set-up in the amount of 0.75% of the value of the yacht, which bank guarantee will be capped at a maximum of one million Euro.
Thus, in terms of these amendments, Maltese and EU owning entities registered for Maltese VAT purposes, will no longer require to have a bank guarantee, in favour of the VAT Department, for a certain applicable amount, to be issued when importing a yacht into Malta which is intended to be used for commercial purposes.
Originally published April 13, 2020
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