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Starting from January 1, 2024, there’s some good news for those looking to rent a “pleasure” boat in Malta! The tax office has introduced a reduced VAT rate of 12% for short-term boat hires, making it easier on the wallet for your aquatic adventures.
Here’s the deal: If you’re hiring a boat for any period or part of a period that doesn’t go over five weeks, you’ll only be charged the 12% VAT rate. But how do you know if you’ve hit that five-week mark?
Well, it’s pretty simple. We look back at the past 12 months and see if the same boat, or a similar one, was rented by the same person. If not, and your current hire doesn’t exceed five weeks, you’re in luck – 12% VAT it is! If it does go over five weeks, no worries, the 12% VAT still applies to the first five weeks.
Now, if the boat was rented to the same person in the past 12 months, and those five weeks weren’t up yet, you’ll still enjoy the 12% VAT rate for the remaining time until they do lapse.
But if those five weeks were already up in the previous rental period, then unfortunately, the standard 18% VAT rate kicks in for your current hire.
So, in a nutshell, this rule is a win-win – making short-term boat hires in Malta a bit lighter on the pocketbook. Happy sailing!
Are you ready to purchase your own yacht? We shall tell you everything about your future yacht registration under Maltese flag in a month time!