Value Added Tax

Value Added Tax (VAT) legislation was first introduced in Malta in 1995. It was then subsequently abolished and re-introduced in Malta legislation in 1999. In view of Malta’s accession to the EU in 2004, VAT legislation was amended to be brought in line with the 6th VAT directive and thereafter subsequently amended to incorporate various amendments such as the change to the place of supply of services rule (as in Amending Directive 2006/112/EC). VAT legislation is regularly amended to reflect changes in EU legislation. Any company that carries out an economic activity is subject to the requirements of VAT legislation and to registration and filing requirements unless exempt by law.

We provide advisory services on the VAT implications arising from various transactions and thereafter provide ongoing compliance with VAT legislation. The VAT rate applicable in Malta is 18%. Reduced rates of 7%, 5% or full exemption are also applicable on certain supplies of goods or services.

Within the context of pleasure yachts and private aircrafts, VAT efficiency may be achieved through the application of the VAT yacht and aircraft leasing arrangements which in certain circumstances substantially reduces the VAT application on the importation of a yacht or aircraft to Malta. The extend of reduction depends on its use and enjoyment within the EU according to objective criteria.

Click here for VAT leasing arrangements in shipping & aviation