Malta has recently implemented changes to the Eighth Schedule of the Value Added Tax Act (Chapter 406 of the Laws of Malta), introducing a reduced VAT rate specifically applicable to the hiring of pleasure yachts.
This modification, influenced by the adoption of Council Directive (EU) 2022/542 on April 5, 2022, marks a departure from the standard 18% VAT rate.
Effective January 1, 2024, this rate is contingent on the cumulative duration of such agreements within a 12-month period not exceeding five weeks.
This reduced VAT rate, also extends to the financial services and healthcare sectors as certain services, namely custody and management of securities, management of credit and credit guarantees (by a person/body other than those who grant the credit), as well as services consisting of the care of the human body by a professional under the Health Care Professions Act, are also captured by Legal Notice 231 of 2023.
While the available information on these amendments is currently limited, the Malta Tax and Customs Administration (MTCA) is expected to release instructions and guidelines regarding the implementation of these amendments. Awaiting further guidance, stakeholders are encouraged to monitor updates from the MTCA.
Do not hesitate to contact us should you wish to learn more or discuss the potential impact of these amendments.
