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At GM Corp. we pride ourselves on being avant-garde and see ourselves as a company that is proactive rather than reactive.  Over the years the portfolio over services we offer has grown tremendously and we will continue to offer the standard of service our clients have come to expect from us.

GM Corporate and
Fiduciary Services Ltd.
147/1, St. Lucia Street,
Valletta VLT 1185, Malta.
+(356) 2123 5341
info@gmint.com
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Yachting
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Considering the strategic location that it has in the centre of the Mediterranean and also in order to capitalise on the ever increasing market of yacht leasing, Malta has devised a structure that apart from offering a safe business solution to those individuals wanting to acquire a pleasure yacht with a VAT paid status, offers the added benefit of owning a Maltese VAT owned yacht under the Maltese flag through a Maltese company.

 

GM Corporate & Fiduciary Ltd.'s sister company, GM International Services Ltd. (GMI), handles all yacht registration procedures and annual maintenance services.

 

By way of introduction, GMI has long been at the forefront of the maritime services industry in Malta and could rightfully claim to be the largest and longest established ship registration company in Malta. Despite ever increasing competition, GMI (as it is affectionately referred to by many in the shipping industry), remains Malta’s premier ship registration company and is proud to have contributed extensively in attaining Malta’s place as the largest registry in Europe, having registered in excess of nine and a half million tons under the Malta Maritime Flag and incorporating well over one thousand shipping companies.
 

Our 36 years of experience in the maritime industry allows us to offer a one stop shop that incorporates all aspects of ship and yacht registration as well as various ancillary services. Furthermore, clients can benefit from comprehensive range of services including agency, husbandry, bunkering, chandling, transhipments, secretarial, accountancy and legal services, including registration of mortgages.
 

Years of experience have taught us at GMI that efficiency, speed, confidentiality and quality service are the only criteria for success in a competitive market. We pride ourselves on our ability to offer clients a specialised service with plans tailor-made to meet individual needs.

Yacht Lease Structure - Value Added Tax (VAT) Benefits
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The VAT Department in Malta has devised a structure that apart from offering a safe business solution to those individuals wanting to acquire a pleasure yacht with a VAT paid status, offers the added benefit of owning a Maltese VAT owned yacht under the Maltese flag through a Maltese company.

 

The system allows for a yacht owned by a Maltese company to be leased to third parties with an option to purchase the yacht at the end of the lease.

 

A financial leasing agreement in respect of a yacht is an agreement whereby the lessor (the owner of the yacht) allows the lessee (the person who leases the yacht) to use the yacht for a stipulated period in return for a consideration (the lease payment). At the end of the lease period, the lessee may opt to purchase the yacht at a percentage of the original price.

 

A supply of services is deemed to take place where the person who makes the supply is established. Given that the company would be deemed to be established in Malta, the place of supply would be deemed to be Malta and therefore, the Maltese Company would have to charge VAT on the income derived under the finance lease. Under Maltese VAT law, the actual leasing of yachts is taxed at the general VAT rate of 18% since it is deemed to be a supply of services in Malta.

 

The VAT department guidelines have determined that VAT is only payable on that portion of the lease during which the yacht is in EU territorial waters. It is very difficult to trail the movements of pleasure vessels in order to determine the period that the vessel spends within the territorial waters of the EU and the time it spends outside the EU. In this respect, these guidelines have issued a “presumed” length of stay during which the yacht is presumed to have been in EU waters, and the VAT rates are prescribed as follows according to the type and length of the vessel:

 

Type of Yacht

% of Lease

subject to VAT

Effective Rate

of VAT

  • Sailing boats or motor boats over 24 metres in length

30%

5.4%

  • Sailing boats between 20.01 to 24 metres in length

40%

7.2%

  • Motor boats between 16.01 to 24 metres in length

40%

7.2%

  • Sailing boats between 10.01 to 20 metres in length

50%

9%

  • Motor boats between 12.01 to 16 metres in length

50%

9%

  • Sailing boats up to 10 metres in length

60%

10.8%

  • Motor boats between 7.51 to 12 metres in length 

(if registered in the commercial register)

60%

10.8%

  • Motor boats up to 7.5 metres in length 

(if registered in the commercial register)

90%

16.2%

  • Craft permitted to sail in protected waters only

100%

18%

 

The beneficial owner acquires the yacht via a Maltese Company. The company is not required to obtain special status or any advance revenue ruling. The main object of the company would be to lease the yacht to the beneficial owner which could be a company or person.

 

The finance lease agreement should last at least one (1) year and cannot exceed three (3) years.  A Leasing Agreement for 18 months is considered as a reasonable period.  At the end of the lease term, the VAT paid certificate is then granted upon payment of VAT dues in accordance with the scheme. As a result, throughout the period of the lease agreement, the vessel would have obtained from circulation within EU waters.

 

For the structure to be valid, the Maltese VAT department has issued the following criteria all of which must be satisfied:

  1. The boat must come to Malta, possibly at the beginning of the lease agreement;

  2. The financial leasing agreement shall be between a  Maltese company and any Maltese or foreign person or company;

  3. The transaction is reported in advance to the VAT department; 

  4. The Maltese company makes a profit of 5% on the transaction; 

  5. The Lease instalments shall be payable every month and the lease agreement shall not exceed 36 months;

  6. Any purchase at the end of the lease agreement shall not be less than 1% of the original value of the vessel, and this will be subject to the standard rate of VAT at 18%. 

   

Vessel with a length of 22 metres

Amount in €

 

 

Value

1,000,000

Estimated profit at 5%

50,000

   

Down Payment:

Total VAT Payments

€ 400,000*40% = 160,000

 

VAT = 160,000 @ 18% = 28,800

28,000

   

Instalments:

 

Balance of 650,000 - 18 monthly

 

Instalments of 36,111 *40% = 14,444

 

VAT = 14,444 @ 18% = 2,600

46,800.00

   

Redemption:

 

1% of Value = 10,000

 

VAT = 10,000 @ 18%

1,800
 

77,400

Effective VAT Rate:

7.74%

 

Payment of VAT in Malta

 

In order to enable us to guide you accordingly, please inform us of the cost of the purchase of the yacht so that we will give you an estimation of the VAT to be paid. This amount is subject to a valuation by a recognised surveyor.  If you consider favourable the proposal, then we suggest that you should start by submitting a valuation of the yacht (the surveyor must be approved by the VAT department and therefore please also submit his c.v. in order to obtain the necessary authorisation) so that we will apply to the VAT department to obtain the approval for the yacht to be registered under this scheme.

 

Should you wish to enquire about the Yacht Leasing Structure and obtain an estimate of the VAT payments, kindly fill in the below details:

























Eligibility for Registration of all Yachts
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Vessels eligible for registration under the Malta Flag, must be wholly owned by:

Citizens of Malta and/or;

European Citizens having a Maltese resident agent and/or;

Bodies corporate established under the subjects of the Laws of Malta and/or;

Foreign corporate bodies or entities  

* In the case of yachts it is advisable to present a request prior to opting for this alternative as yachts are only accepted at the discretion of the Registrar.  

Registration Requirements for Pleasure Yachts
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Requirements for Provisional Registration:

 

1. Power of Attorney, unless authorised through the Memorandum and Articles of Association of the company (if Maltese Company) or through the Declaration of Resident Agent (if Foreign Body Entity).

2. Application for Registry:- 

Please complete the application form containing information of the vessel.

• Click here for specimen for Maltese Owning Company

• Click here for specimen for Foreign Entity

• Click here for specimen for European Citizen Owner

 

3. It is advisable to apply for the reservation of the vessel's name prior to registration.  The name may be reserved for a period of 3 months upon payment of €23.29.  Your request in this regard would be required.

4. Encumbrances. Please advise whether the vessel is being sold free from encumbrances or otherwise. 

5. Tonnage Certificate. A copy of the International Tonnage Certificate if length is over 24m.

6. Kindly confirm if yacht is equipped with Radio Equipment.

7. Settlement of yacht registration fees.

8. Specific Instructions to Register.

 

Upon receipt of all above together with your specific instructions to register the yacht, we should be in a position to proceed with provisional registration. 

Please bear in mind that if registration of the yacht takes place prior to the delivery, registration can be declared as being null and void resulting in bankers (in case of mortgages) requesting re-registration; thus incurring registration fees all over again.

 

Requirements for Permanent Registration:

 

Having received the above information/documentation, a provisional certificate will be issued for a period of six months with a possible maximum extension of another six months (upon receipt of 1, 2, and 3 below). We would like to inform you that in order to maintain registry and to proceed with the permanent registration of the yacht, the following documents are required within the prescribed time allowed (from provisional registration date).

1. Deletion Certificate (in original) from last port of registry (within one month). 

2. Ship’s Carving and Marking Note (within one month). This is issued by the Merchant Shipping Directorate (formerly Malta Maritime Authority) upon provisional registration and should be endorsed by a recognised surveyor or a Maltese consul. 

3. In case of yachts 24 metres and over, the Merchant Shipping Directorate (formerly Malta Maritime Authority) will issue a new Carving and Marking Note, if the net tonnage is different from the NRT on the previous tonnage certificate when the I.T.C. (item 4 below) is issued on behalf of the Malta Government.

4. Bill of Sale in original (within one month - which has to be dated between the date of the formation of the company and the date of filing the declaration of ownership). 

5. Tonnage Measurement Certificate of Survey (within six months) issued on behalf of the Malta Government. If yacht is over 24 metres a separate International Tonnage Certificate and Certificate of Survey are required.

6. The return of the original Provisional Certificate of Registry

 

The Registrar may, for good cause, allow an extension of the prescribed time allowed by another month for items (1), (2) and (3) above and by another three months for items (4).

 

If the yacht is a new construction, then items (1) and (3) above must be replaced by an original Builder’s Certificate made to the order of the "Owning Company" and dated as per instructions in 3 above.

 

After receipt of the above documents the Permanent Certificate will be issued.

 

If the yacht is used for Trading purposes (and not as a pleasure yacht) then the owning company is liable to Income Tax at 35% on the net profits made.

 

Government (Merchant Shipping Directorate (formerly Malta Maritime Authority)) Fees

Fees Payable upon Provisional Registration:

Yacht Basic Registration Tax Refer to Table A
Yacht Initial Tonnage Tax Refer to Table B
Yacht Annual Tonnage Tax Refer to Table C
 

Fees payable on the anniversary of registration i.e. after the lapse of 12 months (to be paid on the anniversary of registration and each year thereafter):

 
Yacht Basic Annual Tax Refer to Table A
Yacht Annual Tonnage Tax Refer to Table C

 

Table A - Yacht Basic Registration/Annual Fee

Yacht Basic Fee for pleasure yachts less than 24m and less than GRT 50  €25
Yacht Basic Fee for pleasure yachts less than 24m and of GRT 50 and over  €150
Yacht Basic Fee for pleasure yachts of 24m length overall and over  €255 

 

Table B - Yacht Tonnage Tax (on registration)

Yacht Initial Registration for pleasure yachts less than 24m length €115
Yacht Initial Registration for pleasure yachts of 24m length overall and over  €0.25 per ton*

*subject to a minimum of €187.50

 

Table C - Yacht Tonnage Tax (annual)

Yacht Annual Registration for pleasure yachts less than 24m length and less than GRT50 €175
Yacht Annual Registration for pleasure yachts less than 24m €200
Yacht Annual Registration for pleasure yachts of 24m length overall and over €0.40 per ton**

**subject to a minimum of €400

Deletion Requirements for all Yachts
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When the owner of a Maltese registered ship wishes to affect a transfer to a foreign registry, an application to this effect should be sent to the Ship’s Registrar accompanied by the following documents:

 

  1. Special Power of Attorney authorising us to sign the necessary application and other documents relating to the deletion of the vessel from the Malta Registry. (This will not be required if we are so authorised in the Memorandum of the company).

  2. Resolution of the Shareholders of the Maltese company resolving to:

    • sell the vessel; and

    • appoint a person to execute, sign, deliver the Bill of Sale and any other documents in connection with the sale.

  3. Discharge of any registered mortgages.

  4. A certified copy of the Bill of Sale between the Maltese company (sellers) and the foreign buyers.

  5. Name of the flag and port (if applicable) after delivery to the foreign buyers.

  6. The return of all the Certificates of Malta Registry.

 

Upon settlement of outstanding fees, a Deletion Certificate confirming Ship’s Registry closed may be obtained.

Payment of VAT in Malta
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In order to enable us to guide you accordingly, please inform us of the cost of the purchase of the yacht so that we will give you an estimation of the VAT to be paid. This amount is subject to a valuation by a recognised surveyor.  If you consider favourable the proposal, then we suggest that you should start by submitting a valuation of the yacht (the surveyor must be approved by the VAT department and therefore please also submit his c.v. in order to obtain the necessary authorisation) so that we will apply to the VAT department to obtain the approval for the yacht to be registered under this scheme.

Should you wish to enquire about the Yacht Leasing Structure and obtain an estimate of the VAT payments, kindly fill in the below details:

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