Notice regarding the 12% reduced VAT rate for yacht charters initiating in Malta

A modified VAT rate of 12% is now applicable to yacht charters (short-term hires) commencing in Malta, as per the amendments introduced by Legal Notice 231 of 2023 to the Eighth Schedule of the Maltese VAT Act (Cap 406 of the Laws of Malta).

This adjusted VAT rate is valid when the yacht is made available to the charterer in Malta, becoming effective for services chargeable for VAT on or after 1st January 2024.

To qualify for the reduced 12% VAT rate, certain key requirements must be met:

• A formal charter agreement must be established between the owner and the charterer.
• The agreement's term, when combined with the duration of any preceding charter/s by the same lessee within the 12 months preceding the charter, should not exceed 35 days.
• The charterer must physically take possession of the yacht in Malta.

The Guidelines and Port Notice featuring several hypothetical scenarios, have been provided to assist interested parties in determining their eligibility for the reduced 12% VAT rate.

These guidelines are accessible through the following links:

• Guidelines for the application of 12% VAT rate on the hiring of pleasure boats - Tax & Customs Administration Malta
• Port Notice No 01/2024: Hiring of a Pleasure Boat - Transport Malta

For any inquiries or guidance on the application of these Guidelines, please feel free to reach out to Rosemont Yacht Services at rys@rosemont-yacht.com. We stand ready to assist you.


03/2024