Malta yachting industry questions European Commission's infringement proceedings against Malta's yacht VAT system

The Malta Yachting industry has questioned the European Commission's infringement proceedings against Malta’s yachting taxes, saying that the European Commission is discriminating against Malta’s yachting industry.

In a statement today, the Yachting Services Trade Section within the Malta Chamber of Commerce, Enterprise and Industry, the Malta Maritime Law Association, the Malta Maritime Forum and the Super Yacht Industry Network Malta referred to the recent Notice of Infringement sent to Malta by EU Commissioner Pierre Moscovici in connection with the practice in Malta on Yacht leases.

Last week, the European Commission sent Malta a letter of formal notice for not levying the correct amount of VAT on the provision of yachts.

“Malta Yacht lease structures have always been set up in line with EU laws,  based on practices tried and tested in other Member States as explained by the Malta Guidelines,” the statement said.

“The industry therefore questions why such a notice of alleged infringement is being sent at all.”

The industry said that it was evident that no similar notice was sent to Member States which apply the same principle under the VAT directive in an identical manner to Malta, such as France and Italy. 

tthe infringement procedure is over Malta’s use of a reduced VAT rate for the lease of yachts. The same warning was sent to Greece and Cyprus, two other maritime states with large ship registries.

“We appeal to and will fully support the Maltese Government to firmly contest this action by EU Commissioner Pierre Moscovici.

“The yachting industry is,  as is the entire maritime  industry in Malta, an important one,” the statement said.

“The yachting industry consists of the large domestic market and forms part of a larger EU yachting eco system which together contribute significantly  to the country’s and EU gross domestic product and have been supporting  a number of jobs for the past 15 years. It is vital that  the EU authorities continue to recognise and encourage this contribution in line with the EU Maritime policy.”

Last week, David Casa also said that the infringement proceedings were baseless, and that other countries apply identical directives as Malta’s.

“the Commission is questioning the classification by Malta of the leasing of a yacht as a supply of a service when France and others also classify yacht leasing in such a manner and as mentioned above in the case of France, apply a reduction of 50%. Why is this being done with respect to Malta and Cyprus?” he said.