We handle ship and yacht registration in Malta and the Marshall Islands.
INCOME TAX EXEMPTION
The profits of a Malta company derived from the operation and ownership of a Maltese registered vessel which falls under the category of a "tonnage tax ship" are exempt from income tax.
A tonnage tax ship is defined as a community ship of not less than 1000 net tonnage which is owned entirely, chartered, managed, administered or operated by a shipping organisation.
CAPITAL GAINS EXEMPTION
No tax shall be charged or payable on 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.
The above mentioned exemptions now also apply to Commercial Yachts. A Commercial Yacht is defined by the Commercial Yacht Code as a yacht which does not carry cargo and does not carry more than 12 passengers.
FISCAL ADVANTAGES FOR SHIP FINANCIERS
Financiers are exempt from the payment of tax in respect of income or other interest payable in relation to any financing of the operations of a Shipping Organisation or the financing of any tonnage tax ship.
VAT INCENTIVES ON MALTA YACHT LEASING
The leasing of a yacht of would attract payment of VAT (18%) as it is considered to be a supply of services. However the supply of services only attracts VAT when the yacht is within the territorial waters of the EU.
Since it is very hard to determine the time a yacht spends in the EU territorial waters, the VAT department in Malta calculates such time spent according to percentages determined according to the type of the yacht. Accordingly the applicable rate of yacht may be reduced as low as 5.4%.
Moreover since the lessor company uses the yacht for its economic activities i.e. the leasing and potential sale of the yacht to the lessee, it has the right to deduct any input VAT on the purchase of the yacht.
This structure enables yacht owners to reduce the VAT payable on the purchase of their yachts. There are a number of conditions which must be met to benefit from such tax rate.
No tax is levied on ships registered in the Marshall Islands, except for the so-called Tonnage Tax. The tonnage tax calculator can be accessible online via the IRI (International Registries Inc.) website. The calculator is accessible here:
Registration under the Marshallese Registry is one of the most pragmatic of the international registries. This registry is geared for an international clientele, having more than 20 offices including Hong Kong, Singapore, Dubai, Germany, Turkey and the UK.
Its advantage is that it is a particularly quick and efficient registry. However, generally it is also pricier than the Malta option.