Category: Latest News

This latest development is based on an EU council directive which allows member states to adopt a VAT rate of no less than 12% on certain services that other member states have derogations on. The good news is that this includes “Hiring of a pleasure boat to a person according to an agreement for any term or part of a term that, when added to the term of a previous hiring, of the same goods or of other goods of the same kind, to the said person during the previous twelve (12) months ending on the date of the beginning of the existing hiring, does not exceed five (5) weeks.”

This means that a yacht that starts her charter in Malta will pay 12% VAT on the charter fee as long as prior arrangements are made such as applying for a VAT no for the owning company in Malta.

Malta also has other benefits to offer, pre charter the yacht will find most of its requirements by way of provisioning, chandleries and any last minute emergency repairs. The island is located in the middle of the Mediterranean and whilst being in itself a gem cruising spot (excellent diving and fishing) is also close enough to other popular destinations such as Sicily, Sardinia and also Greece. Malta boasts a myriad of fine dining venues and beautiful Hotels if required. It is also a fantastic place for Crew to relax between charters. Our airport is very well connected and we are able to handle guests arriving by private Jets using the VIP lounge and luxury cars for transfer purposes.

S&D Yachts are well experienced with this procedure having applied it for several years under a previous structure. Pre planning is highly recommended since the procedure needs time to be put in place.

We can also organize the Commercial Yacht Exemption Importation from Malta which does have certain benefits over other Commercial Exemptions in that it is easier to operate without the need to log trips for example.

Every day, we strive to refine and update ourselves to meet the evolving demands of the market, delivering the highest standard of service within our sector. We would be glad to meet you to explain the wonderful benefits of this incentive to your charter clients. At S&D we are proud to able to look after the whole procedure in house from applying for the necessary fiscal requirements to organizing all the logistics including berth reservation and looking after any requirements that the crew, captain or guests may have.

A VDY procedure is based on EU case law and is effectively a long-term rental structure between a lessor and a lessee. A special purpose Maltese company (the lessor) will be incorporated as the legal owner of the yacht. The shareholding structure of the lessor may be a myriad of options available to the customer. There will be a lease agreement between the lessor and the lessee, who will be paying VAT on the use of the yacht during the duration of the lease.

The main advantage of the VDY is Time Value of money. Money available at the present time is worth more than the identical sum in the future because of money’s potential to grow in value over a given period of time. It is important to note that the VAT on installments is not VAT paid on the vessel and at the end of any lease structure the vessel does not become VAT PAID neither can the VAT already paid be offset against any VAT that may become due on the value of the hull.

If the yacht is sold there are four scenarios according to below buyer types:

1. A non-EU Owner

2. A company wishing to operate the yacht commercially for charter

3. A private EU person to use the yacht for private use

4. A trade-in for another larger yacht

In the case of 1 and 2 above, this yacht will be preferred to a more expensive yacht that is VAT PAID. If the yacht is sold to another EU national as in case 3 above, the new owner may opt to go for a VDY structure and invest the capital in a similar way to the above or he may wish to pay the full VAT on the residual market value of the yacht at the time. In the case of a trade-in the yacht would be taken in by the dealer VAT unpaid. The payment of the VAT on the used yacht will be the responsibility of the person buying it from the dealer eventually and can be one of the cases 1, 2 or 3 above.

The yacht may be registered as a private or commercial yacht under the ownership of the lessor company. Our Flag department may assist with all formalities.

We look forward to discussing VDY in further detail in order to explain the case specific benefits. We will provide calculations that will clearly demonstrate the advantages of this structure. We will prepare a case specific plan according to the value of the yacht and once you have decided to go ahead, we may provide a legal opinion about the structure. The structure will be set up and we will organize for the importation (if applicable) of the yacht into Malta. In this regard S&D Yachts is a registered customs operator and will look after the complete process of importing the yacht into Malta.

Our yacht Agency department will look after all the arrival formalities including berthing at our own facilities and all other logistical requirements whilst the yacht is in Malta. Our offices and yacht chandleries are located in the main yacht marinas to offer efficient service to our clients.

We also operate a subsidiary company in Tunisia in case an Export is necessary prior to arrival into Malta.

During the lifetime of the lease, we will look after the complete management of both the operation as well as flagging if required.

For this reason, we are truly able to offer a one stop shop service hence our ability to honor our quality promise and deliver the high level of service that has become synonymous with S&D Yachts.

The Merchant Shipping directorate of Malta has recently designed a code (sCYC) dedicated to Small Commercial yachts below 24m which includes Yacht Tenders, Ancillary Craft and Chase boats in accordance with international regulations and standards.

Effective from the 1st of April 2024, is specifically tailored for small commercial yachts ranging from 12 meters to 24 meters in length and engaged in commercial operations, with a passenger limit of 12. The code establishes safety and operational requirements for this category of yachts offering a framework for the design, construction, and operation of these vessels. By adhering to the sCYC, yacht owners and operators can demonstrate their commitment to safety, professionalism, and environmental responsibility whilst availing themselves of the benefits provided by this new legislation.

Safety Standards: The code outlines rigorous safety measures covering areas such as stability, firefighting equipment, life-saving appliances, and navigation systems.

Operational Guidelines: Owners and operators are provided with clear guidance on crewing requirements, training, emergency procedures, and maintenance protocols as well as established cruising distances from safe haven

Environmental Protection: The sCYC emphasizes sustainable practices, encouraging the use of eco-friendly technologies and responsible waste management strategies.

Navigating regulatory changes can be complex, but you don’t have to do it alone. Our team is here to support you every step of the way, from understanding the requirements of the sCYC to assisting with compliance and formalities with Transport Malta as your local Agent. Since CE certification is an important requirement of the sCYC, at S&D we are able to assist directly with CE certification as well as liaise with authorized Government Surveyors and deal with all the documentation with Flag. The dedicated Flag department at S&D boasts decades of experience dealing with yacht registrations and our Flagging team is totally committed to providing professional, efficient and exceptional service to our clients.