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.
In identifying a potential flag administration under which to register a vessel, fiscal considerations play a significant role. Malta is the smallest European country with the largest ship register in Europe and the sixth largest worldwide. As at end of December 2014, the registered gross tonnage was 57.9 million gross tons with over 2,500 merchant vessels flying the Maltese flag. The success of the Maltese flag is arguably due, in no small measure, to the application of a favourable tonnage tax regime introduced by virtue of the Merchant Shipping Act, 1973.
A guide to ship registration in Malta
The dreaded VAT question which is invariably asked by a yacht owner, is whether to charge VAT on the supply of services consisting in making the said yacht available for charter. The main concern here is naturally the necessity to retain competitive charter rates, whilst remaining above board from a VAT perspective.
A short-term charter of a yacht is defined as an agreement whereby the yacht owner/operator contracts the use of the yacht for a consideration with a crew or on a bare boat basis for a period which cannot exceed 90 days.