New 12% VAT rate in Malta in 2024
New 12% VAT rate in Malta as of 1 January 2024. It applies to chartering activity under certain circumstances and some other services.
Malta introduced a new 12% VAT rate applicable to chartering activity under certain circumstances, custody and management of securities, management of credit and guarantees, and services related to the care of the human body.
Particularly, the 12% reduced rate applies to chartering activity, or short-term leases of pleasure boats, when such lease does not exceed 5 weeks. The Maltese authorities have provided official guidance on which scenarios the reduced rate applies.
In order to assess if the service contract can be considered as a short-term lease subject to a 12% VAT rate and to calculate the 5-week term, you will need to consider the previous leases made by the same person during the previous 12 months. This means:
- If the same person has leased the yacht in different occasions but for an accumulated duration of more than 5 weeks in the previous 12 months, the new lease is no longer at a reduced rate of 12%. Instead, the standard VAT rate 18% applies.
- If it is the first time that the person hires the boat and the current duration exceeds the 5 weeks, the first 5 weeks will be subject to 12% VAT rate and the rest will be subject to 18% VAT rate (standard).