Malta, in its history, has been known as a sea-faring nation. This, together with its geographical position, has made it a very important stepping stone in the Mediterranean. Such a strategic position has invariably resulted in shipping becoming a very important aspect of business in Malta, and it was only natural that a sophisticated and sound shipping registry was to evolve and make the Maltese flag one of the most prestigious flags for a vessel to fly. From a fiscal perspective, Maltese tonnage tax ships registered within the appropriate vehicles may enjoy very advantageous tax exemptions from profits emanating from the transport of goods and persons.
Our firm regularly assists clients in setting-up and advising on the appropriate corporate structures and registration under the Valletta flag. To this effect both private and commercial vessels, engaged within in their respective shipping activities, may benefit from the various fiscal and non-fiscal advantages which emanate from Maltese vessel registration and the Maltese tax regime.
In 2007, the Maltese VAT department issued guidelines on the tax treatment of VAT leasing on sea vessels, and the possibility to set structures in motion to acquire a low VAT-paid status for sea vessels. Within the ambit of private vessels, an important aspect of European Community legislation is for a vessel to be VAT-paid, in order to enable such vessel free unencumbered movement within EU territorial waters. With VAT rates varying across Europe with the minimum lowest statutory rate being at 15%, the Maltese leasing structure provides for the possibility to get a VAT rate of as low as 6%.
Our firm would be able to advise and provide the relative guidance on the correct manner in which to set up the necessary corporate structure within the ambit of the leasing guidelines, and procure this reduced VAT-paid rate. We have experience in setting up structures for various vessels, including privately-owned super yachts, which provide flexibility to clients including the possibility of chartering to third parties whilst maintaining a VAT-lease plan in place.