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Over the past decade, Malta has consolidated its status as an international Mediterranean centre of maritime excellence. Currently Malta has the largest shipping register in Europe and the sixth largest in the world. In addition, Malta has become a world leader for commercial yacht registration.
As well as its strategic position, in the centre of the Mediterranean, one of the main contributors to Malta’s success is the business-friendly environment adopted by the Maltese authorities. The authorities are approachable and flexible in their practices, while at the same time meticulously follow a rigid framework of guidelines and regulations, and this has created a cutting edge for Malta within this sector.
A number of advantages are available to yachts registered under the Malta Flag, which include:
- No trading restrictions and preferential treatment in many ports.
- The Malta Flag is on the white list of the Paris MoU, Tokyo MoU and on the Low Risk Ship List of the Paris MoU. In addition, Malta has adopted all International Maritime Conventions.
- All types of vessel, from pleasure yachts to oil rigs, may be registered in the name of legally constituted corporate bodies or entities (irrespective of nationality), or by European Union citizens.
- A Maltese yacht may also be bareboat charter registered under another flag.
There are a number of reasons to consider ship registration in Malta:
- The Malta registry is on the Paris MOU and Tokyo MOU white lists.
- Vessels registered under the Malta Flag have no trading restrictions and are given preferential treatment in many ports.
- Registration of vessels under the Maltese flag takes place in two stages. A vessel is provisionally registered for a six-month period. This is an easy and fast process. During this provisional registration period the owner is required to submit additional documentation and then the vessel is permanently registered under the Maltese flag.
- There is an exemption from stamp duty in Malta on the registration and/or sale of a ship, shares relating to a licensed shipping organisation and the registration of a mortgage relating to a ship. Ships aged 15 years and over, but under 20 years, must pass an inspection by an authorised flag state inspector before or within a month of, provisional registration.
- Ships aged 20 years and over but under 25 years, must pass an inspection by an authorised flag state inspector prior to being provisionally registered.
The Maltese Shipping Tonnage Tax System
Under the Malta Tonnage Tax System, tax is dependent on the tonnage of the vessel or fleet belonging to a particular ship-owner or ship-manager. Only companies that are active in maritime transport are eligible under the Maritime Guidelines.
Standard corporate tax rules do not apply to shipping activities in Malta. Instead shipping operations are subject to an annual tax consisting of a registration fee and annual tonnage tax. The rate of tonnage tax reduces according to the age of the vessel.
As an example, a trading ship measuring 80 metres, with 10,000 gross tonnage, built in the year 2000, will pay a fee of €6,524 on registration and €5,514 annual tax thereafter.
The smallest category of ship is up to a net tonnage of 2,500 and the largest, and most expensive, are ships over 50,000 net tonnage. Charges are reduced for ships in the 0-5 and 5-10 year old age categories respectively and are greatest for those 25-30 years old.
Taxation of Shipping Activities in Malta
- Income derived from shipping activities by a licensed shipping organisation is exempt from income tax.
- Income derived from ship management activities by a ship manager is exempt from income tax.
In all other circumstances:
- Shipping companies incorporated in Malta are taxed on their worldwide income and capital gains.
- Shipping companies not incorporated in Malta, but where control and management are exercised in Malta, are taxed on local income and capital gains and on foreign source income remitted to Malta.
- Shipping companies not incorporated in Malta and where management and control are not exercised in Malta, are taxed on income and capital gains arising in Malta.
Ship management activities are now included in the tonnage tax system. This means that ship managers are allowed to pay a tonnage tax which is equivalent to a percentage of the tonnage tax paid by the owners and/or charterers of the ships managed. Any income derived by a ship manager from ship management activities is deemed to be income derived from shipping activities and is therefore exempt from income tax.
The reputation and importance of the Maltese Aircraft Register grows year on year and this jurisdiction offers a straightforward and efficient incorporation and registration process.The Maltese Regime is particularly attractive to individuals and companies seeking to register small aircraft (including business jets). In addition, Malta offers an extensive network of Double Taxation Treaties, with over 60 currently in force.
Key Advantages and Features of the Malta Aircraft Register
- Malta’s location makes it logistically easy to provide access to European and African markets
- Aviation professionals can benefit from specifically designed expat tax statuses
- Malta offers a whole spectrum of services in this sector such as aircraft repair and overhaul, management, leasing, maintenance, training amongst others
- Malta adopts a pro-business culture and has put in place a number of incentives to support start-ups as well as growing businesses
- Malta allows for registration of an aircraft under construction provided that it is uniquely identifiable.
- The Double Tier Tax Structure allows tax free holding of funds and reinvestment of retained earnings through a Malta Holding Company.
- The taxation of aircraft structures in Malta offers advantageous frameworks both for commercial and also for private registrations
- No withholding tax applies on the distribution of dividends.
J. Vassallo CPA FCCA Dip. Tax FIA MIT
C. Azzopardi ACCA MIM MIA CPA
H. Kotze CA(SA)
Company Number: C43184
Malta Office Information
Dixcart Management Malta Limited provides expertise to international clients, both companies and individuals, seeking to benefit from the organisation of their activities in Malta.
Dixcart Management Malta Limited
2, Sir Augustus Bartolo Street
Ta’ Xbiex XBX1091
Malta Office Services
A comprehensive range of services are available from our office in Malta:
Establishment and Management of an appropriate Corporate Structure
Dixcart Malta can advise on the most appropriate structure to protect assets and optimise the income from those assets.
Assistance with the Registration of Yacht, Ship or Aircraft
Dixcart Air Marine provides advice on the advantages and the tax and commercial efficiencies available in Malta.
Coordination of Importing the Yacht, Ship or Aircraft into the EU
Dixcart can provide all of the professional services from the preparation work in advance to assist with customs clearance, through to ongoing registration requirements once the vessel has been imported.
Assistance with Ongoing Corporate Services
A comprehensive range of management and secretarial services are available, including directorship arrangements, filing of appropriate returns, etc.
Accounting and Bookkeeping Services
Due diligence and support to ensure that all compliance requirements are fully met.
Assistance with Crewing
Dixcart can draft and organise appropriate contracts and assist with the coordination of payroll.
Ongoing Annual Registration Requirements
Dixcart in Malta has extensive expertise in ship registration and ongoing requirements in order to maintain documentation.