On 12th March 2020, the Office of the Commissioner for Revenue (“CfR”) published new guidelines (the “Guidelines”) in connection with the leasing of pleasure yachts and the corresponding treatment of such leases for VAT purposes, which guidelines are essentially based on Article 59a of the EU VAT Directive.
A overview of the manner in which Malta-registered Aircraft may constitute debt security.
Malta has in recent years become an attractive base for anyone involved in the aviation industry. Malta’s Aviation Registry has in fact continued to achieve a steady growth with a record of 61 aircraft registered in 2015. The success of the Aviation Registry is sustained by fiscal incentives including a low corporate tax regime as well as rebate on profits. This is complemented by specialised technical personnel who are readily available, flexible and accessible.
The Malta Commercial Code was launched in 2006 and brings together in one document the requirements for both yachts below 24 metres and yachts above 24 metres in order to be operated commercially. As at December 2015 more than 230 yachts, with an average length of 31 metres, are registered as commercial yachts under the Malta flag.
A snapshot of the Malta VAT treatment of aircraft leasing arrangements.
A company incorporated in Malta is considered to be ordinarily resident and domiciled in Malta and is therefore subject to Malta tax on its world-wide income at the standard rate of 35%. Since the 35% tax rate to which a Maltese company is subject is equivalent to the maximum progressive rate of tax applicable to its shareholders, a dividend distribution would typically result in no further tax payable at shareholder level. Moreover, the 35% tax rate is heavily reduced by application of Malta’s refundable tax credit system explained further below.
By virtue of Legal Notice LN47/2014, the Government of the Republic of Malta grants, after a rigid and thorough due diligence process, naturalisation by investment to reputable individuals and their dependants who will make a significant contribution to the social and economic development of the country. The Malta Individual Investor Programme (IIP) is the first citizenship programme in the EU to be recognised by the European Commission.
An overview of the salient provisions comprising the Maltese employment law architecture.
The trust was fully incorporated into Maltese law as a unique legal institute available indiscriminately to all and sundry by virtue of the Malta Trusts and Trustees Act. The said Trusts and Trustees Act was modelled on the Jersey trusts law (which represented a much acclaimed attempt to codify the English law of Trusts). The said Trusts and Trustees Act also transposed, into domestic law, the provisions of the Hague Convention on the Law Applicable to Trusts and on their Recognition – ratified by Malta in 1994.
Foundations are defined domestically as constituting an organisation consisting of a universality of things constituted by one or more founders whereby assets are destined either:
(i) for the fulfillment of a specified purpose – such foundations being referred to as ‘purpose foundations’; or
(ii) for the benefit of a named person or class of persons – such foundations being referred to as ‘private foundations’.