In principle, the importation of a yacht in Malta is subject to 18% Maltese VAT, payable to the Customs Authorities at point of customs clearance.
When the yacht is imported for non-business purpose, the 18% import VAT would not be reclaimable.
Conversely when the yacht is intended to be leased out or used commercially (“Commercial Yacht”), the import VAT can be claimed back by the importer through standard VAT claim procedures.
However, Malta applies attractive VAT deferment procedures for Commercial Yachts which replace the need to physically pay and eventually recover the VAT i.e. which give a substantial cashflow advantage to the importer. These procedures have recently become less onerous. Subject to the satisfaction of certain conditions, VAT-registered importers of Commercial Yachts may procure an authorisation for such VAT to be deferred, even without the need of a bank guarantee in cases when the Revenue Authorities can easily follow the activities of the person importing the yacht. In other instances, the most that the Revenue Authorities would require is either a bank guarantee of 0.75% of the yacht’s value, capped at EUR1 million or the appointment of a VAT representative in terms of Maltese VAT law.
As an alternative to the commercial importation of a yacht in Malta one could also avail from the Temporary Importation or Temporary Admission.
Temporary Importation / Temporary Admission is open to owners of yachts not resident in the EU who plan to use the yacht temporarily in the territory of the European Union. Such Temporary Importation / Temporary Admission procedure can be done via Malta, in which case, the yacht in question would have to enter the European Union through Malta. Certain Customs formalities would need to be adhered to. Under Temporary Importation / Temporary Admission procedure, the yacht would be able to sail freely within the territory of the European Union for a maximum period of 18 months.