Most yachts of a certain size travel constantly in and outside EU waters.

Where a leased yacht is used partly in EU waters and partly outside, only the portion of the lease payment corresponding to the use in the EU should be subject to VAT. In view of the objective difficulty to establish the extent of the use of the yacht within EU and non-EU waters at the moment of purchase of the yacht, or its importation within EU waters, the Guidelines published by the Maltese Government objectively provide for the percentage of the VAT to be charged by the Maltese Government.

The Guidelines distinguish between vessels in terms of their size and propulsion, as indicated in the table below:

Type of vesselDeemed EU useEffective VAT rateVAT saving
Motor yachts and sailing yachts exceeding 24 metres in length30%5.4%12.6%
Sailing yachts between 20 and 24 metres long

Motor yachts between 16 and 24 metres long
40%7.2%10.8%
Sailing yachts between 10 and 20 metres long

Motor yachts between 12 and 16 metres long
50%9%9%
Sailing yachts up to 10 metres long

Motor yachts between 7.5 and 12 metres long, and registered in the commercial register
60%10.8%7.2%