On the 4th of March 2024 the Ports and Yachting Directorate in Malta issued port notice no. 01 of 2024 pursuant to which it brought to the attention to all concerned the reduced VAT rate of 12% applicable in relation to the hiring of pleasure yachts introduced by Malta. The Malta Tax & Customs Administration has recently issued comprehensive guidelines to assist all concerned with the implementation of the VAT rate.

The notice advises that (i) the hiring of a pleasure boat is deemed to be a commercial operation and that (ii) a pleasure boat is deemed to be any vessel hired for pleasure purposes, which is commercially licensed and certified in terms of the Commercial Vessels Regulations (S.L. 499.23) or in the case of a visiting vessel, a vessel which complies with the commercial certification and/or licensing requirements issued by the respective flag Administration.

Additionally, the notice clarifies that visiting pleasure boats calling Malta for the purpose of, inter alia, commencing a charter operation and/or berthing/mooring purposes but whose usual course of operations and navigation is outside Maltese territorial waters are exempt from complying with the Commercial Vessels Regulations.

Our Tax and VAT Compliance teams are available to provide further guidance.