Superyachts Archives

Commercial Yacht – Pleasure Yacht Changeover Guidelines – 2 September 2021

September 6, 2021 Leave a Comment

On the 2nd of September 2021 the Merchant Shipping Directorate of Transport Malta issued the “Commercial Yacht – Pleasure Yacht Changeover Guidelines” (the Guidelines). The Guidelines serve both to lay down certain important considerations with respect to the change of registration of a Malta flag yacht from pleasure to a commercial (and vice versa) and to set out the procedural steps to be followed when yacht owners intend to carry out this change.

While the change in status of Malta flagged yachts has to date been readily accepted and processed by the Malta Ship Registry, the Guidelines now provide clear guidance on the steps to be followed in achieving the changes, in line with the Malta Commercial Yacht Code. The Guidelines clarify that the Merchant Shipping Directorate at Transport Malta imposes no limits on the number of changes made to the registration status of a Malta flagged yacht. The Guidelines further confirm that there is no limit on the duration of the change of registration, thereby offering yacht owners a considerable degree of flexibility with respect to changing their yacht’s registration.

Whilst this degree of flexibility is offered to the yacht owners, the Guidelines recommend that the same survey and certification regime as required for commercial yachts is retained when changing from a commercial to a pleasure registration. This is intended to facilitate a change back to commercial status. Additionally, the Guidelines specify that an undertaking to be signed by the owner or the manager of the yacht attesting that they will return the current certificate of registry of the yacht is to be filed immediately together with the request to change registration of the yacht.

The Guidelines set out that in the event of multiple changeovers during a single year the fees due to Transport Malta for a change from a pleasure to a commercial registration of the yacht shall be paid only once during the said year and not with each changeover.

The Guidelines are a welcome development since they provide yacht owners, managers and representatives clarity on the salient considerations for yacht registration changeovers and the procedural aspects linked to changeovers under the Maltese flag.

The Guidelines including the procedural steps for the changeover process may be found here.

by Matthew Cassar, Fenech & Fenech Advocates

Source: Lexology

Malta Yachting Industry challenges Notice by EU Commissioner

March 20, 2018 Leave a Comment

The Malta Maritime Law Association, the Malta Maritime Forum, the Yachting Services Trade Section within the Malta Chamber of Commerce, Enterprise and Industry, the Institute of Financial Services Practitioners and the Super Yacht Industry Network Malta denounce the recent Notice sent to Malta by the EU Commissioner in connection with the Maltese VAT rules for pleasure yachts.

In light of the fact that the Maltese system is fully in line with EU law and no similar notice was sent to Member States which apply the same principle under the EU’s VAT Directive the Maltese yachting industry questions why such a notice has been sent at all and why this discriminatory approach is being adopted by the Commissioner.

It is noted that the manner in which Malta has applied the option granted by Article 59a of the European Union’s VAT Directive is exactly the same as that adopted by Italy. Indeed, Malta’s rules on effective use and enjoyment of pleasure yachts within and outside EU territorial waters mirror those adopted by Italy through Circular No 49 of 7 June, 2002 issued by the Agenzia delle Entrate (Italian Revenue authorities).

The actual percentages of deemed use of yachts within EU territorial waters adopted by Malta are identical to those which Italy had drafted in the said Circular. Malta has certainly not re-invented the wheel, but has rather based itself on a similar interpretation given by Italy which the Italian tax authorities confirmed most recently in October 2010 through a “Vademecum del Leasing Nautico” issued with the collaboration of the Italian tax authorities.

Furthermore it is highlighted that France has been recognising since 2005 that it is difficult for lessors of yachts to establish how much a leased yacht is used within EU waters. Article 13 of the Administrative Instruction 3 A-1-05 published by the French tax authorities in Bulletin Officiel des Imports on 24 January, 2005 recognises such difficulty, and then allows yacht lessors to apply a 50% reduction on the total lease amount, irrespective of the category of the yacht. In practice, this means that only 50% of French VAT would be payable as a result of this French rule.

Malta’s system does not exempt yachts from payment of VAT but rather provides guidelines (as allowed for by the EU Directive) regarding deemed use outside and within EU territorial waters such that yachts using such guidelines will always pay VAT at varying degrees.

We believe that both the Italian and French systems do not infringe the EU vat laws. Therefore we cannot understand why Malta’s system should be singled out.

We appeal to the President of the European Commission, Mr Jean Claude Juncker, to intervene in this matter so as to ensure that there is no discrimination against smaller EU States like Malta.

It is also the belief of the local Yachting Industry that it is in the European Union’s collective interest that the Commission protects the European yachting sector in line with the EU’s Integrated Maritime Policy thereby ensuring that Europe does not lose out to competition in the maritime sector by non-EU countries.

Finally, we appeal to all political parties and stakeholders in Malta in a situation where the Maltese system reflects a legitimate application of a principle of EU law which is supported by other EU Member States, to act as a united front in protecting Malta’s yachting industry.

Joint Communiqué

November 20, 2017 Leave a Comment

The Malta Maritime Law Association, Malta Maritime Forum, The Yachting Trade Section within the Malta Chamber of Commerce and Super Yacht Industry Network Malta have issued a communiqué in reaction to the articles reported in the press on a communication sent by the French Commissioner Pierre Mascovici to Minister Scicluna regarding the application of rules on VAT relative to yachts.

Read the full text

New Guidelines on Private yacht carriage capacity

April 12, 2017 Leave a Comment

At the start of 2017 Transport Malta, the authority responsible for the administration of the Malta flag, introduced new guidelines that allow more than 12 persons on board privately registered yachts.

Since their launch, these guidelines have been welcomed by the industry, not least since they represent the consolidation of a flexible approach towards authorisation for the carriage of additional guests on board and a departure from the previously strict requirement for yachts to be built in accordance with the International Convention for the Safety of Life at Sea or the Passenger Yacht Code and registered with a red ensign flag.

These guidelines apply to yachts both above and below 500 gross tonnes and will be applied on a case-by-case basis at the discretion of the authority. Further, pleasure yachts falling within the ambit of the guidelines will be prohibited from navigating more than 150 miles from a safe haven while carrying more than 12 persons.

Requirements

Yachts falling under the guidelines must:

hold a valid class certificate (a requirement applicable for yachts over 500 gross tonnes);
comply with the requirements of the Commercial Yacht Code;
possess an approved stability booklet, which covers the loading conditions relative to the total number of persons being requested on board;
install and carry the appropriate safety equipment, depending on the expected number of persons on board;
have a 100% life raft capacity;
carry a compliment crew in line with the Commercial Yacht Code;
have been issued a safety radio statement of compliance (applicable to yachts over 300 gross tonnes) or a safety radio certificate (for yachts over 500 gross tonnes); and
comply with the International Convention for the Prevention of Pollution from Ships requirements, as detailed in the Commercial Yacht Code.

The guidelines also require an intermediate survey to be effected every two-and-a-half-years, starting from the date on which the vessel is allowed to carry more than 12 persons. The aim of this survey is to verify the continued compliance with the minimum requirements.

Comment

The Malta flag has increasingly garnered a solid reputation as being one of the leading European flags and is favoured by owners, financiers and operators of private and commercial yachts. Speaking at the Fifth Opportunities in Superyachts Conference organised in Malta on the February 23 2017, Minister for Transport and Infrastructure Joe Mizzi noted a record increase of over 14% in the registration of superyachts over 24 metres under the Malta flag over the past year. He attributed this success to the high level of service offered by both the public and private sectors and the “various initiatives and strategies in favour of the industry offering a holistic package”.

The new guidelines stem both from a recognition by the Maltese administration that there is a gap in the superyacht market and the administration’s continued effort to remain at the forefront as a leading yachting flag, which is conscious of the need to meet the industry’s frequently changing requirements while maintaining the highest possible technical standards.

Contributed by Alison Vassallo, Fenech & Fenech Advocates

Source: ILO 12 April 2017

Malta – Logical Choice for Superyacht Owners

April 15, 2015 Leave a Comment

The third annual Opportunities in Superyachts Conference was held at the Westin Dragonara in Malta on March 26 2015. As in previous years, the conference attracted a substantial number of local and foreign lawyers, marina and yard representatives, yacht and insurance brokers and financiers and audit firms.

Over the past eight years Malta has enjoyed success within the superyacht sector, steadily increasing the volume of its registered fleet and the number of yachts which are not necessarily registered in Malta but which have otherwise benefited from the solutions offered by the jurisdiction. As such, it is unsurprising that the presentations and panel discussions largely focused on what Malta offers owners and operators of private and commercial yachts.

Conference overview
During the conference, José Herrera – Parliamentary Secretary for Competitiveness and Economic Growth – referred to an announcement made in February 2015 by Transport Malta (the Maltese regulatory body in charge of shipping matters), which revealed a 13.6% increase in the registration of commercial yachts over 2014. The conference also coincided with the launch of Yachting Malta Ltd – a partnership between the government and the Royal Malta Yacht Club – which has the sole objective of promoting Malta as a leading destination for high-profile yachting events.

While undoubtedly representing the cornerstone of a maritime nation’s portfolio, success is not measured solely by the amount of registered tonnage or size of a jurisdiction’s flag – although Malta is the largest European flag and the sixth largest in the world, with latest published figures indicating that Malta has 292 privately registered yachts over 24 metres and 160 commercially registered yachts over 24 metres as of December 2014.

James Lawson – who chaired the conference – spoke of Malta as the “neatest and safest” option, not only with regard to registration requirements (leaving aside temporary importation scenarios where a non-EU flag would be mandatory), but also with regard to its corporate services, tax planning, general efficiency and consistently high-level service. The third session of the conference focused on tax, value added tax (VAT), corporate ownership and registration, which were exhaustively covered by means of an excellent presentation delivered by Janet Xanthopoulos, head of the yacht division of Monaco-based Monoeci Management.

Panel discussion
A panel discussion after the main presentation identified and discussed key topics, including: the impact of the application of VAT on charters in Malta; the accounting of VAT on imports of commercial yachts in Malta; and the security that Maltese law offers financiers. Other significant topics of discussion were the increases in owners registering their yachts under EU flags – which is seen as one of the factors contributing to Malta’s success – and various instances of owners choosing to switch their yachts from commercial use to private use. The panel’s concluding comments identified Malta as a leading example of the importance of EU member states maintaining tax regimes that are beneficial (as opposed to punitive) to owners in order for the sector to thrive.

For further information on this topic please contact Alison Vassallo at Fenech & Fenech Advocates on t. +356 2124 1232 or email alison.vassallo@fenlex.com. See also the Fenech & Fenech website.

Contributed by Fenech & Fenech Advocates ILO

Member of the Comité Maritime International

Commercial Yacht – Pleasure Yacht Changeover Guidelines – 2 September 2021

Malta Yachting Industry challenges Notice by EU Commissioner

Joint Communiqué

New Guidelines on Private yacht carriage capacity

Malta – Logical Choice for Superyacht Owners

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