VAT Treatment of Short-Term Yacht Chartering
A short term charter of a yacht is defined as an agreement under which the yacht owner/operator contracts the use of the yacht for reward, whether with a crew or on a bare boat basis, for a maximum of 90 days.
For VAT purposes, the short-term charter of a yacht for leisure purposes is a supply of a service that is taxable at the standard 18% VAT rate. The place of taxation is where the yacht is placed at the disposal of the customer, in this case Malta. Subject to certain conditions, the taxation of this supply is limited to that portion of the use of the yacht within the territorial waters of the EU.