The Government of Malta has followed the example of France and Italy and has established their own Yacht Leasing Scheme which results in considerable VAT benefits.

This scheme has been developed from cooperation between the relevant Maltese Government Departments and representatives of the Marine Industry. It follows the basic principles of the Italian and French schemes. It has the force of law in Malta and through the Maltese membership of the Union , throughout the EU. The benefit of this structure over the French and Italian schemes is that the base rate of VAT at 18% is lower than the applicable rates in France and Italy .

Pelagos Yachts Malta - a subsidiary of Pelagos Yachts Limited , has been formed to provide this service to our clients. Using this structure the yachts involved can be registered in any EU member state whilst enjoying the fiscal benefits of the Maltese system.

Below follows an overview of how the scheme works and how the VAT and fees are calculated.

Whilst the examples below relate to self financing independent marine finance will also be available through our usual marine finance providers.

In addition to substantial savings being available to the buyers of new boats within the EU, the structure can also be used for yachts arriving from outside the EU.

Procedure

1. A loan for the purchase price of the yacht is made to our VAT registered Maltese company - Pelagos ( Malta ) Limited (PML).
2. The purchase is treated as an intra community supply of goods. VAT is accounted for by PML with the right to deduct input tax.
3. PML leases the yacht to the client (individual or company). The lease will be for a minimum of one year and a maximum of 3 years and carry a commercial return to the Lessor of 5% per annum. The yacht value for vat purposes is 105% of the suppliers invoice price.
4. In the event that the loan has been provided by the lessee, the lease will require an initial payment of 50% plus VAT. The only amount that will require funding will be the VAT.
5. The yacht can be registered in any EU member state that the lessee requires.
6. A mortgage for the value of the loan will be registered over the vessel in favour of the lender.
7. The balance of the outstanding lease will be paid in monthly instalments. In the event that the loan has been provided by the lessee then only the VAT amount will need to be funded.
8. VAT at 18% is charged on all payments under the lease on a sliding scale based on the invoice value of the yacht and depending on the size and type (see scale below) The effective rates depending on the vessel will be between 5.7-9.4%. (This is subject to the valuation being approved by the Maltese Government VAT Commissioner)

1. At the end of the lease the buyer can exercise an option to purchase the yacht for 1% of the original lease value plus VAT at 18%
2. A VAT paid certificate will be issued by the Maltese VAT and Customs Authority
3. The lease can be accelerated and terminated early without penalty
4. The yacht should be located in Malta at the termination of the lease when the purchase option is exercised.
5. The lessee will be required to deposit with the leasing company at the outset of the leasing contract funds equivalent to the amount of VAT due in total under the terms of the leasing contract