Commercial Yachts

The advantages pertaining to the registration of vessels in Malta were up until recently associated with the registration of vessels over 1,000GT. These benefits were, by virtue of the introduction of the Commercial Yacht Code in 2006, extended also to commercial yachts. This introduction renders the registration of superyachts in Malta extremely advantageous for owners, charterers and managers.

Essentially, the general principle is that in cases where a Maltese registered vessel is owned, chartered or managed by a Maltese Shipping Organization, then no income tax is due on or in relation to the ownership, operation or management of the said vessel. The Maltese owner, charterer or manager would be liable to pay an annual tonnage tax due to the Authority that is calculated with reference to the net registered tonnage of the vessel.

Thus in terms of Maltese law commercial yachts registered in Malta and owned, chartered or managed by Maltese shipping organizations, pay an annual tonnage tax instead of tax on income. The Maltese Merchant Shipping (Taxation and Other Matters Relating to Shipping Organisations) Regulations in fact provide that no tax under the Income Tax Act shall be charged or payable on the income of a licensed shipping organisation in respect of:

• income derived from shipping activities; and

• any income, profits or gains derived from the sale or other transfer of a tonnage tax ship or from the disposal of any rights to acquire a ship which when delivered or completed would qualify as a tonnage tax ship; and

• any gain arising on the liquidation, redemption, cancellation, or any other disposal of shares, securities or any other interest, including goodwill, held in any licensed shipping organization owning, operating, administering or managing a tonnage tax ship while she was a tonnage tax ship.

The Merchant Shipping (Taxation and Other Matters Relating to Shipping Organisations) Regulations defines a "tonnage tax ship" as a ship declared to be a tonnage tax ship by the Minister or a Community ship of not less than 1000 net tonnage which is owned entirely, chartered, managed, administered or operated by a shipping organisation. The tax benefit is therefore extended to commercial vessels registered in terms of the Commercial Yacht Code which commercial yachts therefore fall within the category of "tonnage tax ships".

OVERVIEW OF ADVANTAGES TO SHIP OWNERS, CHARTERERS AND MANAGERS

• Complete tax exemption to owners, charterers and managers of Maltese registered yachts.
• No trade restrictions.
• Low Company formation and Ship Registration costs.
• No restrictions on the nationality of the shareholders and directors of Maltese companies.
• No restrictions on the nationality of the Master, officers and crew carried on board Maltese vessels.
• No restrictions on the sale or transfer of shares of a Company owning a Maltese Ship.
• Straightforward and quick company and vessel registration procedures.
• The Shipping Registry offers a 24-hour service, seven days a week in respect of urgent matters.
• Eligibility of a Non-Maltese Shipping Company to own and operate Malta flagged vessels.

REQUIREMENTS FOR REGISTRATION UNDER THE MALTA FLAG

The requirements for registration under the Malta flag vary depending on the particular category that the yacht qualifies under as per the following divisions:

A. Vessels below 24 meters in length and less than 500GT
B. Vessels above 24 meters in length and less than 500GT
C. Vessels above 24 metres in length and above 500GT

There is naturally much information to be given regarding the above depending on the categories referred to. We would therefore be delighted to offer more information specific to your requirements.