Dr Matthew Attard in his capacity as President of the Malta Maritime Law Association was invited to participate at the Quaynote held on 14th March 2024. The synergy between entities and the role of digitalization were at the centre of the panel discussion entitled ‘Doing Business in Malta’, which highlighted the advantages of doing business in Malta within the competitive Superyacht scene and delved into the challenges and current projects that will enhance the success of this thriving industry.
The panel was moderated by Ms Annalise Zammit, MBR’s COO and Deputy Registrar. Further to Dr Attard, Dr Geraldine Spiteri Lucas, MBR’s CEO and Registrar, Mr Michael Mifsud, CEO of Yachting Malta, Mr Mark Savona, Registrar of Ships’ Assistant Registrar, Dr Ingrid Fenech, Official Receiver and MBR’s Head of Insolvency and Receivership Service, Dr Marthese Portelli CEO of the The Malta Chamber participated in the discussion.
A way forward for Malta’s maritime industry – William Vella
The government’s mission is to further support the yachting industry in Malta
The maritime industry has historically been a long-standing pillar of the Maltese economy. Admittedly, it became more so once Malta joined the EU. The challenge remains in keeping abreast of regulatory and legislative developments while remaining competitive with other jurisdictions.
The exponential growth experienced by the Malta flag over the last 32 years is a feather in the cap of successive government administrations that have always recognised the importance of this economic activity, which generates over €24 million annually. This does not include the total amount generated by private stakeholders involved directly and indirectly in ship registration services, which amounts to circa €200.27 million. The new Merchant Shipping Act came into force on April 6, 1973. Early 1977 saw further changes to the legal and administrative side of shipping. The collective effort of the various stakeholders in the sector, including Transport Malta, has put Malta on the map as the leading jurisdiction in shipping and yachting, with the biggest register in Europe and a leading register globally.
Along the years, there have been amendments to the original legislation to render it more receptive to operational adjustments and circumstances, including the payment of fees; provisional registration; priority of mortgages; ranking of credits; and bareboat charter registration among others. Such resilience has encouraged and supported the recent impressive expansion in the superyacht registration context.
Notwithstanding these achievements, this success should not serve as an alienation from the necessity to continuously review and adjust to ensure that the level of service being provided by both the private sector and the authorities is maintained and improved.
Earlier this year, the Ministry for Transport, Infrastructure and Capital Projects, headed by Minister Aaron Farrugia, launched the idea of a first National Policy for Superyachts during the Malta Superyacht Symposium jointly organised by the Malta Chamber and the Malta Maritime Law Association. The policy is expected to be released in the coming months. A steering committee, comprising prominent industry experts, among which the Malta Chamber and the MMLA, has been set up to evaluate several proposals by key industry players to identify how this industry can be further developed. These same key industry players, together with the steering committee, tackled several areas within the yachting sector. The policy is expected to be released in the coming months
The prime focus was that of achieving a more robust and clearer regulatory framework. Another area that was discussed was how to better equip and maintain the current infrastructure and cost structure. Additionally, the matter of how government departments and the private sector can work in tandem in an efficient manner was explored.
Government support was another topic of discussion and was considered at length. The discussion evolved on how the government can be of support to its agencies and authorities and to the private sector. Ultimately, green investment was also on the agenda of the steering committee where several proposals taking in consideration the environmental aspect in yachting were put forward and discussed.
It was made clear that the government’s mission is to further support the yachting industry in Malta and to consolidate Malta’s position as a leading yachting jurisdiction and as an international centre of maritime excellence in the Mediterranean. This will eventually lead to the contribution and creation of quality jobs in Malta. The need for such a policy is key for achieving and retaining excellence in the making is the outcome of consistent determination over the years, together with the outstanding quality and competence emanating from both the public and private sectors.
However, given the cutthroat competition, there’s no resting on one’s laurels. The National Yachting Policy is the way forward for Malta to achieve its objectives and remain the relevant go-to jurisdiction.
William Vella is a legal and compliance manager at Dixcart Management Malta Ltd and a member of the Malta Chamber of Commerce, the European Maritime Law Organisation and Malta Maritime Law Association.
Source: Times of Malta
Commercial Yacht – Pleasure Yacht Changeover Guidelines – 2 September 2021
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
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
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.