VAT & Yacht Leasing in Malta

General Information


Main Benefits


Malta VAT is only payable on a portion of lease payments made to a Maltese leasing company owning a yacht. This portion depends on the length and type of yacht. Any yacht exceeding 24 metres in length will derive the highest benefits as only 30% of the lease payments are subject to Malta VAT.

The VAT Department issues a certificate that VAT is being accounted for by the Malta leasing company soon after the first payment of Malta VAT is made.

A VAT paid certificate is issued by the Malta VAT Department at the end of the lease if the yacht is purchased by the lessee.

Yacht Leasing Guidelines


In 2005 the Malta VAT Department issued Guidelines in 2005 regarding the VAT treatment of yacht leasing by Maltese companies and the above benefits arise from these Guidelines.

It is assumed that any yacht would be partly used within EU territorial waters and partly outside the EU. The Guidelines provide guidance as to the deemed percentage use of a yacht within and outside EU waters. The longer the yacht, the greater the deemed percentage of use outside EU waters which would then fall outside the scope of VAT.  The lease of the yacht would be considered to be a supply of services taking place in Malta subject to Malta VAT.

Main features of Malta Yacht Lease


  • A Maltese Company must be incorporated for the purpose of acquiring legal title to the yacht (the Owner).
  • The Owner is registered for VAT purposes with the Malta VAT Department.
  • The Owner leases the yacht to an individual or to another corporate entity (the Lessee) in terms of a lease agreement.
  • The terms of the lease agreement must be from 1-3 years.
  • The lease installments are payable on a monthly basis, but VAT is only paid every quarter.
  • The first lease installment should be equivalent to 50% of the total value of the yacht.
  • The Owner is to make a profit on the lease arrangement.




  • If the Lessee exercises an option to purchase the yacht in Maltese waters after the end of the lease, a VAT paid certificate will be issued.
  • The purchase price at the end of the lease agreement must be at least 1% of the original value of the yacht. Maltese VAT at the rate of 18% is payable on this redemption value.
  • At the commencement of the lease, the Commissioner of VAT must first approve the value of the yacht and the applicable percentage of the lease payments on which VAT is chargeable.
  • This percentage is related to the use of the yacht in EU territorial waters as per the table below.





Type of yacht



Percentage of lease

Payments subject to VAT

Effective rate of VAT

Saling boats or motor boats over 24 metres in length



Saling boats or motor boats between 20.01-24 metres in length



Motor boats between 16.01-24 metres in length



Sailing boats between 10.01-20 metres in length



Motor boats between 12.01-16 metres in length



Sailing boats up to 10 metres in length



Motor boats between 7.51-12 metres in length



Motor boats up to 7.5 metres in length

(if registered in the commercial register)



Craft permitted to sail in protected waters only