nizoral canada produce Contributed by Fenech & Fenech Advocates
ILO – August 21 2013
Following similar announcements recently made by France and Italy, on July 29 2013 the Maltese authorities published the Guidelines for the Value Added Tax (VAT) Treatment of Short-Term Yacht Chartering. The guidelines address situations in which a short-term charter of a yacht with a crew (or on a bareboat charter basis) is entered into between the owner or operator and the charterer for a consideration.
In terms of Article 56(1) of EC Directive 2006/112 on the common system of VAT, the place of short-term hiring of a means of transport is deemed to be the place where the means of transport is actually put at the disposal of the customer. Article 56(2) provides that in the case of vessels, ‘short-term’ shall mean the continuous possession or use of the means of transport throughout a period of not more than 90 days.
The short-term charter of a yacht to be used for leisure purposes is a supply of a service that is taxable at the standard rate of VAT at the place where the yacht is placed at the disposal of the customer. Therefore, where the yacht is placed at the disposal of the customer in Malta, the charter would be subject to VAT at the standard rate of 18% on the hire that is paid by the charterer to the owner by way of consideration.
Under these guidelines, subject to a number of conditions stipulated by the guidelines themselves and any further conditions that may be imposed, this supply may be taxed according to the portion of the yacht’s use within the territorial waters of the European Union. This is based on Article 59a of EC Directive 2006/112, which provides that member states may consider the place of supply of yachts capable of international travel as being situated
outside the Community if the effective use and enjoyment of the services or part thereof takes place outside the Community.
Since it is difficult to determine the physical movement of a yacht in order to establish the period that the yacht spends within the territorial waters of the European Union and that it spends outside territorial waters of the European Union, the guidelines provide that an acceptable measure would be the length of the yacht and its method of propulsion. The guidelines then establish the estimated percentage proportion of the charter, based on the time
that the yacht is used within the territorial waters of the European Union. The standard rate of VAT at 18% is applied to the established percentage of the charter deemed to relate to its use within EU territorial waters. By way of example, sailing or motor yachts over 24 metres in length would be susceptible to taxation on 30% of the hire that is paid on the charter.
Following the submission of a number of documents to the VAT department – which include, but are not limited to, evidence that the owner or operator of the yacht is registered to VAT in Malta, details of the yacht and a copy of the charterparty – and provided that the conditions established in the guidelines and any other further requirements stipulated by the director general of VAT are met to the latter’s satisfaction, the applicant would be informed in writing of the applicable proportion of the charter fee that would be subject to VAT. Prior approval must be sought in writing from the VAT department and each application will be considered on a case-by-case basis.
The subject of yacht charters sees a coupling of Malta’s steadily increasing reputation as a yachting hub on a legislative front with the attractiveness that it may offer those seeking an alternative cruising ground in the Mediterranean. While the concentration of yacht charters has traditionally and will remain scattered along the French Riviera, as a result of its unique location and proximity to Sicily and Tunisia, Malta undeniably offers a fascinating option as the starting point to a charter holiday in the Mediterranean.
http://jamesmastercoach.com/78970-meclizine-where-to-buy.html For further information on this topic please contact Alison Vassallo at Fenech & Fenech
Advocates by telephone (+356 2124 1232), fax (+356 2599 0645) or email email@example.com.