Malta Aircraft Ownership Structures

AIRCRAFT REGISTRATION: 5-7 days VAT ON PRIVATE AIRCRAFT: 5.4% - 18% effective rate ACCESSIBILITY & EMERGENCY: 24 hours registry services MALTA AVIATION ACTIVITY: 70% increase in 4 years

• Effective VAT Rate of 5.4%
• Free Circulation in EU Airspace
• VAT Paid Certificate
• No Eligibility Requirements
• Easier Resale of Aircraft in the EU

In the context of private jets, Malta provides for the possibility of fiscal planning and VAT payment minimization based on their use in the EU. Aircraft leasing structures as detailed in the Guidelines Regarding VAT treatment of Aircraft Leasing issued by the Maltese VAT department, provide for the payment of VAT due in relation to the supply of services, that is the leasing of the aircraft, depending on the time the aircraft is used within EU airspace, potentially applying an effective VAT rate of 5.4%.
The guidelines are based on the application of the ‘use and enjoyment’ provisions provided for by the EU VAT Directive and the Maltese VAT Act.

In accordance with Maltese VAT legislation, for VAT purposes and other than aircraft used by airline operators in international traffic:

• the lease by a person established in Malta
• of an aircraft used solely for private use
• which is leased for more than 30 days
• to a person established in Malta and
• put at the disposal of the customer in Malta,

is a supply of a service which is subject to VAT in Malta with the right of deduction of input VAT by the lessor (where such right applies). This service is taxable according to the use of the aircraft attributed within the airspace of the EU.

The following are the requirements:

• the leasing of the aircraft is undertaken through Malta and hence the aircraft must be in Malta at the beginning of the lease;
• the lease instalments are paid every month;
• the lease agreement does not exceed 60 months;
• prior approval is sought from the VAT department for consideration on a case by case basis.