12% Reduced VAT rate on hiring of pleasure boats
12% Reduced VAT rate on hiring of pleasure boats
The Commissioner for Tax and Customs published guidelines for the application of the reduced VAT rate of 12% on the hiring of pleasure boats that takes place in Malta. The reduced VAT rate was was introduced through Legal Notice 231 of 2023 and is effective from 1st January 2024.
When and how it applies?
The reduced VAT rate is applicable to short term charters of pleasure boats, (or the part thereof), when during the previous twelve months (ending on the date of the beginning of the excising hiring) a previous hiring, of the same goods or of other goods of the same kind, together with the existing hiring (or part thereof) do not exceed 5 weeks (35 days).The Guidelines bring further clarity on the practical aspects when the reduced VAT rate is not applicable to the full duration of the existing hiring but could only be applied to part of the hiring term.