VAT Treatment of Yacht Leasing
The Maltese VAT Department issued gudielines on the VAT treatment of yacht leasing in terms of the effective use of enjoyment rules.
The Maltese VAT yacht leasing scheme permits the acquisition of a yacht without suffering exorbitant VAT costs on the purchase whilst at the same time not requiring a complex corporate set up.
In fact, it is based on the setup of a single company in Malta which would acquire the yacht and subsequently lease such pleasure craft to a person or another company. The company, which would act as the lessor has the right to deduct input tax (VAT) on the purchase of a yacht, since it will be carrying out the economic activity, that is the leasing of the yacht, but would charge VAT on only a portion of the lease payment, depending on the use of the pleasure craft within the EU.