A number of firms active in the maritime field have politely pointed out that the Maltese VAT scheme on yacht leasing is similar to that in France and Italy – and that nothing has been altered since it was approved in 2009.
The Malta Maritime Law Association, the Malta Maritime Forum, the yachting trade section within the Malta Chamber of Commerce, Enterprise and Industry, and the Super Yacht Industry Network Malta issued a joint communique after they heard that French Commissioner Pierre Moscovici had taken the somewhat unusual step of writing directly to Finance Minister Edward Scicluna.
The presence of these yachts in the EU in turn means further increased maritime activity for all those throughout Europe involved in marine-related services
The joint communique makes it clear that the VAT scheme was based on the principle of “effective use and enjoyment” as enshrined in article 59a of the VAT directive, which allows member states to limit the VAT payable on a supply of services to that portion only which reflects use and enjoyment of the service within the EU.
“No changes to the application of this principle have been effected since communications were made to the European Commission on the VAT treatment of long term hire of pleasure yachts, way back in 2009.
“Malta's VAT treatment of the leasing of pleasure yachts on the basis of the effective use and enjoyment principles in the EU VAT Directive has been based on the similar application of this principle by other Member States, in particular France and Italy,” it said.
The firms made it clear that the EU had benefitted from the activity generated, as yachts might otherwise have stayed outside EU waters.
“The presence of these yachts in the EU in turn means further increased maritime activity for all those throughout Europe involved in marine-related services ranging from general suppliers to yachts to technical services to wintering services,” they said.
They said that as practitioners they had assisted clients with the payment of VAT which had in turn “the creation of a flourishing EU-based yachting industry very much in line with the vision of the first Green Paper on an EU maritime policy as enunciated in 2006”.
“Malta is an ideally positioned yachting destination in its own right straddling western and eastern Mediterranean cruising grounds, it has a large domestic market and a substantial international market. Together these markets contribute significantly to the country’s and to Europe’s maritime dimension. It is vital that the EU authorities continue to recognise and encourage this contribution in line with the EU Maritime policy,” they warned.