Jurisdiction: Malta

Aviation in Malta: Market Niches and a Bright Future. Interview with the Director of the Civil Aviation Directorate.

Posted on | by Megan Raguro | Leave a Comment on Aviation in Malta: Market Niches and a Bright Future. Interview with the Director of the Civil Aviation Directorate.

Our Malta office had the pleasure to interview Capt. Charles Pace, the Director of the Civil Aviation Directorate. Capt. Pace shared his views on the current status of the aviation sector in Malta, the competitive edge that Malta has compared to other jurisdictions, new market segments and his vision for the future.

Malta is now an aviation hub, with a Maintenance, Repair and Overhaul (MRO) sector, flight training and aviation software providers, as well as increased interest in Unmanned Aerial Vehicle Development. Malta is also part of important international agreements such as the Cape Town Convention. International players such as Lufthansa, Malta Air, Wizz Air, Lauda Air and more have chosen Malta as one of the bases for their operations. What are the main drivers that led these companies to take such decisions?

“The robust legal framework, the use of the English language, a favourable taxation and also the efficiency of the Civil Aviation Directorate are the main reasons mentioned by many companies. It is a fact that many companies move operations to Malta from other jurisdictions. They tell us how difficult it can be to do business in certain countries and that we give them a level of efficiency that is highly appreciated. The fact that our staff go the extra mile to process applications and to travel at short notice is extremely appreciated, as well as the availability, accessibility and willingness of our inspectors to assist during the application process. We also have an online system through which all applications are received. This cuts down on time and paperwork and is a transparent way of processing applications. The team at CAD has grown in size and, at the same time, is also much more proficient. Through a balanced pragmatic approach, we try to tick all the boxes.”

Malta is also an interesting jurisdiction for aircraft leasing structures, and there is a strong intention to further reinforce Malta’s offering in this space. How does this work? What are the current advantages for leasing structures in Malta and, in your opinion, what are the elements needed to further reinforce Malta’s offering in aircraft leasing?

“Leasing has been present in Malta for a while now. A few years ago, we carried out an analysis of our laws and made some tweaks to improve Malta’s position. Today, we have a very good product and companies have started to look at Malta as an alternative jurisdiction. In this period, we would need more exposure as well as buy in by the local banks. This being said, there are several companies that already operate through Malta. I would estimate around 400 aircraft are leased through Malta based companies, and this could easily double in the near future with other companies taking the plunge. We will have to prepare for an increase of the market size, for instance by creating university degrees that include modules related to leasing, and aviation accounting practices. We need more visibility both internationally and locally, to attract more business but also to create the talent that is needed to service a growing industry.”

In recent years, there is the tendency for airlines to lease their aircraft, rather than buying them. Many Malta AOCs owners offer this kind of services to commercial airlines – do you see space for further growth? Why is Malta better positioned, compared to other jurisdictions?

“Aircraft, crew, maintenance, and insurance (ACMI) has been very popular even pre COVID-19. Today, with the delays in production of new aircraft and also groundings due to engine problems, ACMI operators are very much in demand.  The Phenomena allows legacy carriers to increase capacity on demand and to replace grounded aircraft. I believe that this will remain a strong market for at least 3 more years due to lack of capacity. The problem is that many carriers are not letting go of aircraft as the new ones on order are delayed. With this scheme, we need to keep in mind however that the margins are tight, and many airlines will struggle despite the high demand. Cost is continuing to increase due to labour demands, fuel (even more with the introduction of SAF mandates kicking in next year) and overflying charges. This leaves airlines in precarious situations as we have seen with first quarter results of at least two major groups lately.”

Since you became Director of the Civil Aviation Directorate, in 2016, the industry grew and so did the Malta Aircraft Registry, which now counts over 880 aircraft and 52 Air Operator Certificate owners. Such growth needs to be constantly supported by the various administrative structures. What were the main challenges that the CAD had to face, to keep up with this growth? 

“Working within the public sector might present, at times, significant challenges because you often need a private sector mentality and the flexibility of a private enterprise to be able to give stakeholders what they need. For instance, some of the main issues were improving the remuneration for staff, getting enough headcount and have the agility to change things quickly.

The industry has gone through highs and lows both of which have brought challenges. High demand for flying means airlines recruit and offer better conditions. This makes it difficult to find people to take up regulatory posts and therefore retention becomes even more crucial. During the pandemic, the situation was the opposite, with many looking for a job but unfortunately for us, some of those who came to us for a job in those dark days left as soon as things improved in the industry. Loosing people at short notice after giving them training is a bitter pill to swallow but is something that happens in many economic sectors. 

A significant change that happened in recent years is that when I first joined, we did not accept helicopters or simulators. Today, on the contrary, we regulate the full range of activities. We have examination centres in other countries and have quite a few projects in the pipeline. Malta offers a low fixed rate of income tax to attract individuals to Malta and this has proven to be a very successful initiative that distinguishes Malta from other countries. In a way, we have been victim of our own success, and it is now difficult to match expectations of the industry while following the procedures of the public sector.”

Unmanned Aerial Vehicles are another sub sector in which Malta aims to become a main player at the international level. UAVs open the door to a multitude of services and operations. What are the main opportunities that you see, in this space?

“Since legislation was introduced by the EU, we have been monitoring the developments. We have a dedicated portal for UAVs and are actively seeking to bring to the island a testing facility that will allow research or testing of larger drones. I am very much interested in using new technology to improve urban mobility: I believe that this will be the future and we need to embrace it. The size of Malta makes it even easier as trips are short favouring electric aircraft which might not be that yet suitable for longer flights. One of the main challenges with new technology is the rather lengthy process of certification by EASA. Although millions are poured into Research and Development, the process to obtain certification and start commercial operations is taking longer than expected.”

You have recently returned from Geneva, where the CAD participated at the European Business Aviation Convention & Exhibition (EBACE) 2024. Was the event successful and do we expect further growth?

“Once again, the CAD participated with a stand at EBACE, in conjunction with the Malta Business Aviation Association. It was yet another opportunity to network, promote Malta and I must say that even this year CAD was very much busy meeting prospective clients and discussing future investments in Malta. The response was very strong, even more than expected, which indicates that we might be in for a productive period in the coming months.”

A look at the future: what do you think Aviation in Malta will look like, in 2035?

“I honestly think that the demand will peak in the next 5 years. I think there will be less airlines around and larger airlines will control the market.  I hope that, by then, we would deploy more aerial vehicles which would replace cars and even certain ferry boats between the islands.”

Dixcart Air Marine

Through our team of experienced professionals, Dixcart Management Malta Limited will assist you in all aspects of registering your aircraft in Malta. Services range from incorporation of the entity owning the aircraft in Malta and full corporate and tax compliance, to the registration of the aircraft under the Maltese Registry, whilst ensuring full compliance with Maltese Aviation legislation.

Additional Information

If you would like further information regarding Aircraft Registration in Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com, at the Dixcart office in Malta or to your usual Dixcart contact.

Charting New Waters: The Market Effects of Malta’s Small Commercial Yacht Code

Posted on | by Megan Raguro | Leave a Comment on Charting New Waters: The Market Effects of Malta’s Small Commercial Yacht Code

The Malta’s Small Commercial Yacht Code is the latest addition to the Maltese yacht legislation. Malta offers deep natural harbours, a strategic position in the middle of the Mediterranean, a climate with 300 days on sunshine per year, widespread use of English and an attractive lifestyle. Add these elements to a robust regulatory framework, state of the art marinas, refit and repair facilities, highly professional international operators and service providers and you will obtain a fully-fledged, international maritime hub. Malta has lined up, over the years, all requirements to be attractive in the yacht and superyacht industry.

The advantages of the Malta Flag

Malta has a long maritime tradition, with a very deep understanding of the industry and a reputable and an internationally recognised register, all supported by a clear, business-oriented vision. Having a yacht flying the Malta flag has numerous advantages, and we invite all those interested to read our article on why considering to register a vessel under the Malta flag.

A forward-looking authority that listens to the operators

The Merchant Shipping Directorate introduced Malta’s Small Commercial Yacht Code (sCYC), effective from the 1st of April 2024, following an extensive consultation process that involved all relevant industry stakeholders. The small commercial yacht segment has been in constant increase in recent years, and the introduction of the sCYC aims to meet the needs, demands and technological advancements of the yachting industry while, at the same time, ensuring compliance with international safety standards.

Applicability and exclusions

The Code is applicable to yachts under commercial use that:

  1. Are at least 12 metres in hull length;
  2. Are less than 24 metres in length;
  3. Are engaged in commercial operations;
  4. Carry no more than 12 passengers.

The code does not apply to Category D vessels, Rigid Inflatable Boats (RIBs), military vessels and any other vessel that is operated for non-commercial use.

The code also states that yachts may be exempted, on a case-by-case basis, and at the sole discretion of the Administration, from any of the Code’s requirements which are proven to be disproportionately onerous and technically impracticable for the yacht.

What changes for the small commercial yachts

One of the most relevant changes is that, under the sCYC, yachts from 12 metres, which previously fell outside the scope of the Commercial Yacht Code (CYC), may also be registered commercially under the Malta flag.

The sCYC updates and replaces the requirements included in the CYC, and all CYC certified yachts are deemed, automatically, to be compliant with the sCYC. However, the sCYC states that any small commercial yacht must be compliant with the new requirements at the time of the vessel’s first renewal survey conducted after 1st June 2024. In addition, sCYC Certified Yachts operating in the territorial waters of other countries must also adhere to any additional requirements stipulated by those specific countries.

The Small Commercial Yacht Code identifies the requirements in terms of safety, crew welfare and pollution prevention that are appropriate to vessels sized between 12 and 24 metres. The regulator addresses the needs of the operators while maintaining these requirements in line with those set out in international conventions and EU Regulations and Directives. This approach of using the EU Recreational Craft Directive (2013/53/EU, as amended) as the basis for the Code is clearly visible with regards to yacht’s design, stability and structure.

Conclusion

The new Small Commercial Yacht Code caters for the specific needs of this niche market. The code encourages more yacht owners to adopt the Malta flag and join the charter market by operating commercially in the Mediterranean and beyond. With this Code, the regulator addresses and accommodates the unique features of this niche market that has been gaining relevance in recent years.

Dixcart in Malta

At Dixcart Malta we have a dedicated team of professionals dealing with yachting matters including, but not limited to, yacht importation, flag registration, resident agent services, crew payroll. We are also able to assist with your Yachting related needs.

Additional Information

For further information about Malta Maritime services, please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com. Alternatively, please speak to your usual Dixcart contact.

Are Malta and Cyprus Shaping the Future of Aviation?

Posted on | by Megan Raguro | Leave a Comment on Are Malta and Cyprus Shaping the Future of Aviation?

The aviation sectors in Malta and Cyprus are experiencing significant growth, leveraging their strategic geographic locations and favourable regulatory environments. These islands are becoming pivotal aviation hubs in Europe, offering a range of services from aircraft registration to appealing leasing schemes.

Expansion and Regulation in Malta’s Aviation Sector

Over the past decade, Malta has solidified its position as a key player in the aviation industry. The government’s proactive approach has helped establish a supportive ecosystem, including a Maintenance, Repair, and Overhaul (MRO) centre that caters to the needs of a growing fleet. The establishment of flight training providers and flight software operators has further enhanced Malta’s aviation infrastructure.

Recent years have seen Malta develop robust drone regulations, creating lucrative opportunities for companies in the Unmanned Aerial Vehicles (UAVs) space, particularly those involved in photo and videography. This regulatory framework makes Malta an appealing destination for aviation-related businesses.

Malta’s Strategic Aviation Benefits

As a regional aviation hub of international repute, Malta’s Aircraft Registry has grown to include over 800 aircraft and 40 Air Operator Certificate owners (AOCs). The presence of international airlines such as Lufthansa, Malta Air, WizzAir, and Lauda Air underlines Malta’s status as a base for operational excellence.

Moreover, Malta offers attractive leasing structures, facilitated by favourable taxation policies. Notably, income from aircraft ownership, operation, or leasing is not taxable in Malta unless remitted to the country. Additionally, there is no withholding tax on lease payments where the lessor is not a tax resident, alongside opportunities related to tax depreciation and shareholder tax refunds.

Malta is a member of the Cape Town Convention on International Interests in Mobile Equipment (or Cape Town Treaty), which standardises transactions involving movable property. These international standards supersede national legislation, therefore the presence of a clear set of rules for aircraft transactions, lowers the risks of lessors (who enjoy preferential ranking remedies in case of default) and, therefore, reduces borrowing costs.

These aspects are complemented by an extensive network of over 80 Double Taxation Agreements (DTAs) and by the possibility, for aviation companies resident in Malta, to claim the notional interest deduction.

Cyprus’s Private Aircraft Leasing Scheme

Cyprus has established itself as prominent jurisdiction for individuals purchasing Aircraft for private use. This is all down to its underutilised Private Aircraft Leasing Scheme which can result in an attractive VAT rate being charged on the purchase of the aircraft. The reduced VAT rate is calculated based on the aircraft’s operational time within EU airspace, the type of aircraft and its maximum take-off weight. However, it should be noted that the eligibility criteria for the scheme are rigorous, but it can result in substantial savings for qualifying purchases.

Cyprus’ host of Advantages for Individuals Purchasing an Aircraft

The private aircraft must be owned by a company registered for VAT in Cyprus (the Lessor) and leased to any physical or legal person that is established in, or resident in, the Republic of Cyprus and not engaged in any business activity (the Lessee).

When you couple this with the fact that Cyprus has one of the lowest corporate tax rates in the EU at 12.5%, you can start to see why the opportunities with leasing private use aircraft have put Cyprus’ aviation industry on the map.

Additionally, the aircraft in question can be registered under any global aircraft registry and is not limited to the Cyprus Aircraft Register.

Qualification Requirements

As can be expected, due to the savings that can be made by applying this scheme there are a number of specific requirements that need to be met.

The key qualification requirement is the receipt of prior approval from the VAT Commissioner. This is done on a case-by-case basis and the VAT Commissioner reserves the right to refuse any application they wish.

Other additional qualification requirements are needed as well in order for the Private Aircraft Leasing Scheme to apply.

How Dixcart Facilitates Aviation Operations

In Cyprus, Dixcart’s services encompass establishing and managing VAT-compliant leasing structures, drafting lease agreements, and securing approvals from the VAT Commissioner. We also handle the importation of aircraft into Cyprus, assisting with all related customs clearance processes.

Dixcart Management Malta Limited offers extensive services to assist with every aspect of aviation operations in Malta. These include the incorporation of entities owning aircraft, full corporate and tax compliance, and registration under the Maltese Registry while ensuring adherence to local aviation legislation.

How can Dixcart Help?

Both Malta and Cyprus offer unique advantages for aviation-related activities, making them ideal jurisdictions for entities and individuals looking to optimise their operational and financial efficiencies. Dixcart is well-equipped to provide detailed guidance and comprehensive services in both regions.

For further information regarding aircraft registration in Malta, please contact Jonathan Vassallo at advice.malta@dixcart.com. For details on the Cyprus Private Aircraft Leasing Scheme and other services, please contact us at advice.cyprus@dixcart.com.

To learn more about Dixcart’s aviation services read our comprehensive article.

Yacht Registration

A Guide to the Advantages of Yacht Registration in: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta

Posted on | by Megan Raguro | Leave a Comment on A Guide to the Advantages of Yacht Registration in: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta

Introduction

For high-net-worth individuals and families, yachts represent not just a mode of transport but also a symbol of luxury and leisure. Owning a yacht in the optimum manner involves various important considerations, including the jurisdiction of registration, which can have a significant impact regarding; tax implications, regulatory compliance, and operational flexibility.

Dixcart Air Marine specialises in assisting clients with yacht registration across different jurisdictions, offering expertise and guidance throughout the process.

Registration of Yachts

The registration of a yacht involves choosing the right jurisdiction, considering factors such as tax regulation, legal framework, and administrative procedures.

Dixcart Air Marine provides comprehensive services, including; coordination of the registration process, advice on tax efficiencies, and ongoing administration and management.

In addition, we can assist with; special purpose vehicles, accounting, customs arrangements, and value-added services such as directorships. Our expertise extends to import and export formalities, asset registration, and advice on VAT and corporate tax.
We handle ongoing registration requirements and closely monitor costs, budgets, and cash flow. We can also assist with crewing, including contracts and payroll.

Choosing the Right Jurisdiction

Selecting the appropriate jurisdiction for yacht registration is crucial. Each jurisdiction offers unique advantages, catering to different needs and preferences. Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta are among the sought-after jurisdictions for yacht owners due to their; favourable tax regimes, regulatory framework, and maritime expertise.

Yacht Registration in Cyprus

Cyprus emerges as an attractive jurisdiction for yacht registration, offering competitive registration fees, low annual costs, and favourable tax provisions. The Cyprus shipping registry has witnessed significant growth and maintains high-quality standards.

Recognised on the Paris and Tokyo MOUs’ whitelists, Cyprus attracts foreign ship owners with its excellent tax benefits and quality fleet. Notable advantages include compliant VAT procedures, and a robust tonnage tax system. Additionally, Cyprus offers tax exemptions on dividend income and profits from foreign establishments, ideal for ship management companies seeking efficiency and reliability.

In May 2010, Cyprus introduced a tonnage tax system in line with EU guidelines. This system calculates the tonnage tax (TT) based on the net tonnage of eligible ships involved in qualifying shipping activities and uses a defined set of band rates as detailed in the appropriate legislation. Instead of taxing profits directly, this system assesses ships based on their size, offering flexibility for companies with diverse business operations under the same group.

Shipping activities are taxed according to ship size, while other operations face a fixed tax rate of 12.5%. Additionally, Cyprus provides various tax advantages to ship management companies, such as exemption from dividend income (under specific conditions), tax-free profits from foreign permanent establishments, and no withholding tax on income repatriation (including dividends, interest, and nearly all royalties).

If you would like further information regarding Yacht Registration in Cyprus, please contact: advice.cyprus@dixcart.com

Yacht Registration in Guernsey

As a member of the Red Ensign Group, Guernsey provides a reputable yacht registry, ensuring stability, tax efficiency, and regulatory compliance. Yachts registered in Guernsey benefit from competitive fees and reliable administration. Utilising a Guernsey corporate structure offers asset protection and other advantages, including access to an exclusive flag and VAT registration. Additionally, Guernsey’s international registration validity, flexible presence requirements, and VAT-free options appeal to yacht owners.

Guernsey provides competitive registration fees without tonnage tax or additional annual ship registry fees. Registrations are internationally recognised, with all documentation available in English and widely accepted.

Importantly, Guernsey-registered yachts are not obligated to visit Guernsey physically. In addition, as Guernsey lies outside the EU VAT territory, it offers advantages to non-EU resident owners who wish to operate their vessels VAT-free in Europe, under Temporary Admission (Temporary Importation) relief, provided they meet eligibility criteria.

If you would like further information regarding Yacht Registration in Guernsey, please contact: advice.guernsey@dixcart.com

Yacht Registration in Isle of Man

The Isle of Man offers advantageous VAT arrangements for commercial charter services, allowing for VAT reclamation on purchases or importations. Yachts owned by Isle of Man-registered companies enjoy zero-rated tax on charter income, along with streamlined customs procedures and tax benefits.

Even if a yacht is not registered on the island, it can still benefit from the Isle of Man’s VAT arrangements, if owned by a company registered for VAT in the Isle of Man, as long as it is used for commercial charter services. In addition, Isle of Man structures enable VAT accounting and reclamation on yacht purchases, facilitating efficient transactions.

Charter income can be subject to a zero-tax rate in the IOM. If a yacht can accommodate ten or more passengers, including crew, it may qualify as ‘passenger transport’ for VAT purposes. In the Isle of Man or the UK, supplies of ‘passenger transport’ are VAT-exempt, while in EU member states, chartering services may be subject to local VAT regulations depending on where the charter occurs.

If you would like further information regarding Yacht Registration in the Isle of Man, please contact: advice.iom@dixcart.com

Yacht Registration in Madeira (Portugal)

Madeira, as part of Portugal, offers a credible and competitive option for yacht registration through its International Shipping Register. Yachts registered in Madeira benefit from EU compliance, VAT advantages, and tax incentives, making it an attractive choice for yacht owning companies.

Madeira’s International Shipping Register (MAR) maintains EU standards and is not recognised as a flag as a convenience by organizations like the International Transport Workers’ Federation (ITF). Additionally, MAR allows full access to EU waters without restrictions for commercial or private yachts. For commercial yachts, MAR offers VAT exemptions on various expenses.

Importing a second-hand yacht into the EU, particularly under Portuguese VAT rules, offers several advantages. Firstly, VAT can be applied to a lower acquisition price based on devaluation, potentially resulting in a significant VAT reduction. For commercial yachts registered on MAR and engaged in charter activities, there are VAT exemptions on the acquisition price, repairs, fuel, provisioning goods, and equipment supply, provided there is regular commercial operation and appropriate charter agreements are in place.

In addition, operational benefits include no citizenship requirements for crew, and exemption from personal income taxes, and flexible social security arrangements for crew members.

Yacht owning companies in Madeira enjoy a favourable tax regime, which includes reduced corporate income tax rates and withholding tax exemptions. Madeira companies benefit from automatic VAT registration, exemptions from initial yacht registration fees, and reduced annual fees. Furthermore, investment routing can eliminate withholding taxes on dividends.

If you would like further information regarding Yacht Registration in Madeira, please contact: advice.portugal@dixcart.com

Yacht Registration in Malta

Over the past decade, Malta has consolidated its status as an international Mediterranean centre of maritime excellence, with the largest shipping register in Europe and the sixth largest in the world. Additionally, Malta offers favourable conditions to yachts used for both private and commercial charter and is a world leader in commercial yacht registration. Its business-friendly environment, strategic Mediterranean location, and adherence to international maritime standards contribute to its prominence.

Maltese registered commercial yachts face no trading restrictions, and there is a fast crew-acknowledgement certification process, with a maximum three-month acknowledgement period.

When a yacht is to be used for commercial chartering, a VAT deferment can be obtained, when a yacht, to be used for a commercial operation, is imported into Malta. The yacht owner is also able to recover VAT incurred on goods and services used for the chartering operation.

Similarly when a yacht is to be used for long term leasing, a VAT deferment can be obtained, with the end user, the lessee, paying VAT on the monthly lease payments over the term of the lease. Furthermore, any usage of the yacht outside EU waters is not subject to VAT.

Sales of yachts by Maltese-licensed shipping organisations incur no Malta tax, and non-Maltese residents selling shares in a yacht-owning company are exempt from capital gains tax under Malta Tax Law.

If you would like further information regarding Yacht Registration in Malta, please contact: advice.malta@dixcart.com

Conclusion and Contact Details

Selecting the right jurisdiction for yacht registration is paramount for maximizing benefits and ensuring regulatory compliance. With its expertise and global presence, Dixcart Air Marine assists clients in navigating the complexities of yacht ownership, offering tailored solutions to meet their specific needs and preferences. Whether interested in registering a yacht in; Cyprus, Guernsey, Isle of Man, Malta, or Portugal, yacht owners can rely on Dixcart’s practical experience to facilitate a smooth registration process and unlock the advantages of each jurisdiction.

If you would like further information regarding Yacht Registration, and aren’t sure what jurisdiction, please contact advice@dixcart.com for further assistance.

Ship Registration

A Guide to the Advantages of Ship Registration in: Cyprus, Guernsey, Madeira (Portugal), and Malta

Posted on | by Megan Raguro | Leave a Comment on A Guide to the Advantages of Ship Registration in: Cyprus, Guernsey, Madeira (Portugal), and Malta

Introduction

Selecting the appropriate jurisdiction for ship registration is a critical decision for ship owners, as this decision impacts on; tax liabilities, operational flexibility, and regulatory compliance.

Dixcart Air Marine, with its extensive experience and global presence, offers comprehensive services to guide clients through the ship registration process in various jurisdictions. From pre-structuring advice to ongoing administration and management, Dixcart ensures a smooth and efficient process for their clients.

Ship registration is complex and while this guide includes relevant and useful information, you will also need to speak to one of our experts: advice@dixcart.com

Ship Registration Services Provided by Dixcart Air Marine

Dixcart Air Marine offers comprehensive support for vessel importation into the EU, ensuring efficient customs clearance procedures. Our expertise extends to establishing ownership structures and facilitating registration in the preferred jurisdiction, complemented by additional services to maintain compliance.

Dixcart’s corporate structuring assistance includes; accounting, secretarial, and ongoing corporate services, including directorships and filing essential returns.

Services Available from Dixcart

  • Coordination and registration of the ship
  • Assistance with the importation of the vessel into the EU, including any necessary customs arrangements
  • Expertise on the relevant holding structure in the jurisdiction of choice
  • Advice regarding a variety of tax incentives that may be applicable, including advice on VAT and corporate tax
  • Administration and management of day-to-day operations, including accounting and secretarial services, monitoring costs, budgets and cash flow in relation to assets, and any statutory requirements
  • Additional services, such as directorships or the provision of corporate office holders
  • Assistance with crewing, including payroll and crew contracts

Choosing the Right Jurisdiction

Different jurisdictions offer unique advantages for ship registration, ranging from tax incentives to the regulatory framework. Research, planning, and professional advice are crucial in selecting the jurisdiction that best aligns with the owner’s objectives.

Dixcart provides professional advisers and clients with the necessary expertise to make informed decisions and maximise the benefits of ship registration. We offer direct experience and expertise in ship registration across the following jurisdictions, where Dixcart has offices; Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta.

Ship Registration in Cyprus- Features and Advantages

Cyprus has emerged as an attractive jurisdiction for ship registration, offering competitive advantages such as favourable tax provisions, low registration fees, and a growing shipping registry with international recognition. The Cyprus shipping registry has made significant strides in enhancing the quality of its fleet and related services.

Cyprus is now on the Paris and Tokyo MoU’s whitelist. Its benefits include VAT exemption on international transport outside the EU, income tax exemption for crew, and a competitive corporate tax rate. Cyprus offers a compliant tonnage tax system, protection for financiers, and adherence to maritime conventions. With competitive costs, Cyprus ship registration is an attractive choice in the industry.

Cyprus offers tax exemptions to international transport services, including VAT exemptions for operations outside the EU, and tax-free crew income on Cypriot vessels. Introduced in 2010, Cyprus operates under a tonnage tax system, aligned with EU standards and calculated based on net tonnage. This system replaces corporate tax, allowing mixed activities within groups.

Tax advantages also include exemptions for; dividend income, foreign profits, and withholding tax on income repatriation. Competitive registration costs further boost Cyprus’ appeal as a maritime hub.

If you would like further information regarding Ship Registration in Cyprus, please contact advice.cyprus@dixcart.com

Ship Registration in Guernsey- Features and Advantages

Guernsey’s reputable ship registry, coupled with its membership of the Red Ensign Group, ensures stability, tax efficiency, and regulatory compliance for registered ships. With streamlined administrative processes and access to a respected flag, Guernsey provides an attractive environment for ship owners looking for reliability and professionalism.

Guernsey’s rich maritime history continues with specialist services available to the marine industry. The registry accommodates vessels up to 150 gross tonnages, including pleasure yachts, with potential future tonnage increases. Commercial vessels of up to 24 meters in load line length can register, provided they comply with safety regulations. Efficient payroll solutions are also available, which comply with the Maritime Labour Convention, 2006.

If you would like further information regarding Ship Registration in Guernsey, please contact advice.guernsey@dixcart.com

Ship Registration in Madeira (Portugal)- Features and Advantages

Madeira, as part of Portugal, offers a credible option for ship registration with EU compliance, VAT advantages, and tax incentives for ship owning companies. With its competitive advantages and strategic location, Madeira provides a valuable opportunity for ship owners seeking efficiency and flexibility in their operations.

The International Shipping Register of Madeira (MAR) was established in 1989 as part of the Madeira International Business Centre (“MIBC”) “package” of taxation benefits. Vessels registered with MAR carry the Portuguese flag and are subject to the International Treaties and Conventions entered by Portugal. MAR is recognised for its high standards, EU credibility, and inclusion in the Paris MOU whitelist, ensuring reliable maritime operations.

Ship-owners registering vessels in MAR face no nationality restrictions and do not need a head office in Madeira; it is sufficient to have local legal representation with adequate powers. With just 30% of safe manning required to be “European”, flexible crew arrangements are allowed, with possible derogation if justified. Crew wages are exempt from income tax and social security charges in Portugal.

Additionally, MAR offers a flexible mortgage system, letting parties select the governing legal system for mortgage terms. Competitive registration fees, no annual tonnage taxes, and temporary registration options, such as bareboat chartering, are also available.

Shipping companies licensed in MAR enjoy a reduced 5% corporate tax rate until 2027. They also receive automatic VAT registration. Additionally, they benefit from exemptions on withholding taxes and capital gains tax under certain conditions. MAR also enables access to all Portuguese Double Taxation Treaties and Investment Protection Treaties, further enhancing tax advantages.

If you would like further information regarding Ship Registration in Madeira, please contact advice.portugal@dixcart.com

Ship Registration in Malta- Features and Advantages

Malta boasts the largest shipping register in Europe, offering a wide range of benefits for registered ships. From preferential treatment in ports to adherence to international conventions, Malta provides a comprehensive framework for ship owners seeking reliability and regulatory compliance. Additionally, Malta offers various tax incentives and exemptions, making it an attractive jurisdiction for ship registration.

The Malta registry is on the Paris MOU and Tokyo MOU whitelists, with no trading restrictions for vessels under the Maltese flag. The Maltese Shipping Tonnage Tax System provides tax dependent on tonnage, with exemptions for shipping activities. Ship management activities are now included in the tonnage tax system, exempting income derived from such activities.

Under the Malta Tonnage Tax System, taxation is determined by the size of vessels owned by a specific ship-owner or manager involved in maritime transport, following Maritime Guidelines. Unlike standard corporate tax rules, shipping operations are subject to an annual tax that includes a registration fee and annual tonnage charge, which decreases as the vessel ages. Fees depend on the vessel’s size, with younger ships receiving discounts and those aged 25-30 years incurring the highest charges.

If you would like further information regarding Ship Registration in Malta, please contact advice.malta@dixcart.com

Conclusion and Contact Details

Selecting the right jurisdiction and professional adviser, such as Dixcart, for ship registration is essential for maximising benefits and ensuring compliance with regulatory requirements.

Dixcart Air Marine, with its expertise and global presence, offers tailored solutions to meet the unique needs of ship owners. Whether attracted to; Cyprus, Guernsey, Isle of Man, Madeira (Portugal), or Malta, ship owners can rely on Dixcart to provide expert guidance and practical solutions throughout the registration process.

If you would like further information regarding Ship Registration, and aren’t sure on which jurisdiction, please contact advice@dixcart.com for assistance.

Aircraft Registration

A Guide to the Advantages of Aircraft Registration in: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta

Posted on | by Megan Raguro | Leave a Comment on A Guide to the Advantages of Aircraft Registration in: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta

Introduction

Dixcart Air Marine specialises in assisting clients with the registration, and ongoing management of various assets, including aircraft, ships, and yachts.

With a global network of experienced professionals, Dixcart provides tailored services to meet the unique needs of professionals and their clients.

Aircraft registration is a complex topic, and this guide aims to explore the advantages of aircraft registration in the following jurisdictions: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta. For additional information, please contact us to be put in touch with an expert: advice@dixcart.com

Aircraft Registration Services Provided by Dixcart Air Marine

From assistance with importation to registration and corporate structuring, we provide expert assistance every step of the way.

With extensive experience in providing support for the importation of aircraft into the EU, Dixcart handle all preparation work and customs clearance procedures, ensuring a streamlined process.

When it comes to registration, we understand the importance of choosing the right jurisdiction based on the aircraft’s usage and location.

Dixcart can establish the appropriate ownership structure, guiding clients through the intricacies of registration with precision and efficiency. Additionally, our corporate structuring services cover accounting, secretarial tasks, VAT, and tax advice, providing professional advisers and clients with a commercial approach to managing aircraft assets.

Choosing the Right Jurisdiction

Dixcart offers expert advice in selecting the most tax-efficient ownership structure and jurisdiction for aircraft registration. With extensive experience and offices in key jurisdictions; including Cyprus, Guernsey, Isle of Man, Malta, and Portugal.

Dixcart ensures efficient coordination of the registration process. Our knowledgeable team provides insights into the regulatory frameworks, tax incentives, and operational considerations, enabling clients to make informed decisions, aligned with their objectives.

Advantages of Aircraft Registration in Cyprus

Cyprus offers a favourable regulatory environment and tax incentives for aircraft registration. With competitive fees and an efficient registration process, Cyprus is an attractive choice for aircraft owners seeking reliability and cost-effectiveness.

Additionally, Cyprus’ strategic location provides easy access to European and international markets, enhancing the aircraft’s operational flexibility.

The Private Aircraft Leasing Guidelines provide that Cyprus VAT will only be applied on a percentage of the lease consideration. The applicable percentages have been determined by the Tax Department and depend on the, length, type of aircraft, and an indication of the presumed time of use of the aircraft in EU air space. There is therefore, no need to maintain a detailed record or log books of the movements of the aircraft, for VAT purposes.

To benefit from the Cyprus Private Aircraft Leasing Guidelines, the private aircraft can be registered under any Aircraft register in the world and not necessarily under the Cyprus Aircraft Register. Certain conditions must be met, and the prior approval of the Cypriot Tax Commissioner needs to be obtained in each case.

If you would like further information regarding Aircraft Registration in Cyprus, please contact advice.cyprus@dixcart.com

Advantages of Aircraft Registration in Guernsey

Guernsey’s reputable regulatory framework and tax-efficient environment make it an ideal jurisdiction for aircraft registration. As a member of the Red Ensign Group, Guernsey adheres to high standards of safety and professionalism in aviation. With streamlined administrative procedures and access to a wide range of aviation-related services, Guernsey offers stability and efficiency for aircraft owners.

Guernsey’s Channel Islands Aircraft Registry, ‘2-REG,’ offers simplified registration with a neutral ‘2-‘ nationality mark.  Registration is available out of sequence; the 2- followed by a four-letter combination, allows for significant personalisation and branding opportunities.

2-REG accepts transfers from various registers, improving flexibility and with a secure mortgage registration system and global inspector network, it offers convenience and security.  

If you would like further information regarding Aircraft Registration in Guernsey, please contact advice.guernsey@dixcart.com

Advantages of Aircraft Registration in Isle of Man

The Isle of Man offers advantageous VAT arrangements and tax benefits for aircraft owners. With a robust regulatory framework and simplified customs procedures, the Isle of Man provides flexibility and efficiency for aircraft registration. In addition, the Isle of Man’s status as a crown dependency of the United Kingdom, ensures adherence to international standards and conventions, instilling confidence in aircraft owners and operators.

With over 1,000 registered aircraft, the Isle of Man Registry ranks as Europe’s second-largest private business jet register and sixth largest globally. It offers a neutral “M” registration prefix and upholds high regulatory standards.

Operating on a commercial yet cost-effective basis, the Isle of Man boasts; zero corporation tax, no insurance premium tax and VAT alignment with the UK. In addition, no capital gains taxes, no capital transfer tax, and no general withholding taxes are payable in the Isle of Man. A final benefit is that no insurance premium tax is payable.

If you would like further information regarding Aircraft Registration in the Isle of Man, please contact advice.iom@dixcart.com

Advantages of Aircraft Registration in Madeira (Portugal)

Madeira, as part of Portugal, provides a credible option for aircraft registration with EU compliance and tax advantages. Madeira presents a compelling option for aircraft registration, leveraging the advantages of INAC’s (the regulatory authority for civil aviation in Portugal), streamlined processes and low registration charges.

Portugal’s registry requires no nationality stipulations for owners, with a rapid 10-day registration turnaround. In addition, Portugal has pioneered fractional aircraft ownership registration and INAC officers are experienced in this field.

INAC is a secure mortgage register – due to its international reputation and safety standards it is on the banks and financial institutions whitelist of aircraft registries.

Air operators that meet certain conditions and with a valid AOC granted by INAC, are entitled to deduct the VAT on the, fuel supply, maintenance, lease, transfer, and repairs to the aircraft. They are also entitled to deduct VAT on the; acquisition, maintenance, repair, and transfer of equipment incorporated into the aircraft or used in its exploitation. This is provided that 50% of the aircraft’s flights are international.

If you would like further information regarding Aircraft Registration in Portugal, please contact advice.portugal@dixcart.com

Advantages of Aircraft Registration in Malta

Malta boasts a reputable aviation registry and extensive tax incentives for aircraft owners. With adherence to international conventions– most notably the Cape Town Convention and Protocol, Malta offers reliability and regulatory compliance for aircraft registration. Additionally, Malta’s comprehensive legal framework and experienced professionals facilitate smooth transactions for aircraft owners, minimising administrative burdens and maximising operational efficiency.

Malta’s location makes it logistically easy to provide access to European and African markets. Malta’s weather conditions also make it the prefect jurisdiction to test aircrafts and train pilots. It offers a wide spectrum of services in this sector such as; aircraft repair and overhaul, management, leasing, maintenance, and training, amongst others.

Aviation professionals can benefit from specifically designed expat tax status, and the taxation of aircraft structures in Malta offers advantageous frameworks, both for commercial and for private registrations.

The Double Tier Tax Structure allows tax free holding of funds and reinvestment of retained earnings through a Malta Holding Company and no withholding tax applies on the distribution of dividends.

In addition, Malta allows for registration of an aircraft under construction, if it is uniquely identifiable.

If you would like further information regarding Aircraft Registration in Malta, please contact advice.malta@dixcart.com

Conclusion and Dixcart Contact Details

Dixcart Air Marine offers comprehensive services to assist aircraft owners in selecting the optimal jurisdiction for registration dependant on their circumstances. Whether in Cyprus, Guernsey, Isle of Man, Malta, or Madeira (Portugal), Dixcart ensures efficient coordination of the registration process, and optimises the benefits available in the circumstances.

With expert guidance and practical solutions, Dixcart helps aircraft owners achieve their objectives efficiently and effectively in an ever-evolving global aviation landscape.

If you would like further information regarding Aircraft Registration, and aren’t sure on a specific jurisdiction, please contact advice@dixart.com for further assistance.

Navigating Malta’s Beneficial VAT Treatment: A Comprehensive Guide for Yacht Owners – Private and Commercial Use Explained

Posted on | by James Navarro | Leave a Comment on Navigating Malta’s Beneficial VAT Treatment: A Comprehensive Guide for Yacht Owners – Private and Commercial Use Explained

VAT Treatment for Private and Commercial use of Yachts in Malta

Background

Malta has gained a high reputation in the shipping and yachting world, not only because of its geographical location but also because it offers attractive and competitive incentives, thereby making Malta one of the top flags in the world. Malta’s solid roots as a maritime location continue to enhance and expand the island’s footing in the maritime industry.

As well as creating a complete service offering for yachts; from shipyards to berthing facilities, to chandlers to maritime professionals, Malta offers ship and yacht owners several attractive solutions, including attractive VAT incentives for yacht and superyacht owners.

Reduced VAT Rate as from the Start of 2024

As from 1st January 2024, short term charters commencing in, Malta have benefited from a reduced 12% VAT rate, subject to the fulfilment of certain criteria.

The Tax & Customs Administration’s has released new Guidelines, specifically tailored for the application of the 12% Value Added Tax (VAT) rate pertaining to the rental of pleasure yachts.

The Guidelines can be accessed by clicking this link.

VAT Treatment of Yachts Intended for Private Use

In March 2020, Malta published its guidelines establishing the means by which leased pleasure yachts are to be treated for VAT purposes, with a particular focus on the use and enjoyment provisions on yacht leasing supplies. The Guidelines issued on the subject matter reflect EU developments and practices.

With respect to operating leases, it is possible for a lessor/owner of a yacht to lease out their yacht to a lessee for a consideration, for a specified period of time. Through such a structure, VAT would be payable by the lessee on the monthly lease instalments, depending on the actual use and enjoyment.

In order to benefit from the said VAT treatment, the following conditions must be  satisfied:

  • The lessor must be a Maltese entity, to be eligible for the Yacht leasing Scheme;
  • There must be a yacht leasing agreement in place between the lessor and lessee setting out the conditions of the lease;
  • The lessee must be a non-taxable person i.e., not using the yacht for commercial business purposes;
  • The yacht must be placed at the disposal of the lessee in Malta;
  • The lessor must maintain documentary and/or technological data to determine the actual use and enjoyment of the pleasure boat within and outside EU territorial waters;

This VAT treatment works depending on the ratio of use and enjoyment of the yacht in or outside EU territorial waters.

As a rule, full VAT payment at the rate of 18% is payable when the place of supply of the service is in Malta; however, in cases where the actual effective use and enjoyment of the pleasure yacht would be outside EU waters, there is an adjustment method that would apply.

The result will be that VAT would only be charged on the actual use and enjoyment of the yacht by the lessee in EU territorial waters. To this end, no VAT shall be due on the portion of the lease where the yacht is effectively used and enjoyed outside EU territorial waters.

Therefore, Malta VAT will be applicable solely on the use of the yacht within EU territorial waters; depending on the effective use and enjoyment of the yacht, possibly making it amongst the lowest VAT rates within the EU Member States.

Importantly, the VAT treatment options also provides an element of flexibility when it comes to exiting or terminating the lease. In the eventuality that at the end of the lease the lessor decides to contract the sale of the yacht in Malta, then VAT, at the prevailing standard rate, is charged on the value of the yacht upon subsequent sale.

In such a case should the Maltese VAT Department be satisfied that the necessary rules and regulations have been duly observed, a VAT Paid Certificate would be issued at their sole discretion.

VAT Treatment of Yachts intended for Commercial Use

Yachts intended for commercial use may opt for VAT deferment on the importation as follows:

  • Obtaining a VAT deferment on the importation of the commercial yacht by a Maltese owning entity having a Maltese VAT registration; without needing to set up a bank guarantee (as historically required); or
  • Obtaining a VAT deferment on the importation of the commercial yacht by an EU owning entity having a Maltese VAT registration, provided that the company duly appoints a VAT representative in Malta, without needing to set up a bank guarantee (as previously required); or
  • Obtaining a VAT deferment on the importation of the commercial yacht by a non-EU owning entity, on provision by the importing entity, of a bank guarantee amounting to the VAT payable on 0.75% of the value of the yacht, capped at one million euros.

To opt for the first proposed VAT deferment structure, one would need to incorporate a company in Malta, and this company would need to obtain a valid Malta VAT identification number. In each instance, the importation of the commercial yacht will require the yacht to physically sail to Malta to undergo VAT and Customs procedures.

Following which, the yacht would be imported into the European Union, with the VAT payment deferred accordingly, rather than paid upon importation. In such a case, the yacht would be able to sail freely and circulate within EU waters.

Services Available from Dixcart Malta

At Dixcart Malta we have a dedicated team of professionals dealing with yachting matters including, but not limited to; yacht importation, flag registration, resident agent services, crew payroll. We are also able to assist with a number of your Yachting related needs.

Additional Information

For further information about Malta Maritime services please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com.

Flagging or Reflagging

Why Consider Registering a Vessel Under the Malta Flag?

Posted on | by Megan Raguro | Leave a Comment on Why Consider Registering a Vessel Under the Malta Flag?

Resident Agency Services for Yachts

Malta has now been established as a reputable maritime jurisdiction for many years. A number of factors have contributed to making Malta a leading maritime hub: a strategic location in the centre of the Mediterranean, natural harbours, and an extensive range of maritime services, including; shipbuilding and repair works, a freeport, bunkering, ship supplies and towage services.

The island’s geographic location has given it significant importance and Malta is now recognised as being a port of entry into the EU.

Malta offers attractive and competitive incentives, making Malta one of the top flags in the world.

Who Can Register a Yacht/Vessel under the Malta Flag?

Under Maltese law, yachts may be owned and registered by; any Maltese, EU/EEA or Swiss national or company, or any third country national who enjoys legal personality that meets the criteria specified by the Registrar of Shipping. Maltese companies are considered to beacceptable ownership vehicles for yachts.

Maltese companies may be established by any person, for the purpose of yacht ownership. The owner, through the company, must be clearly identifiable, and non-Maltese owners must appoint a Maltese resident agent to liaise with the authorities.

Once a yacht is registered in the Maltese registry there are no restrictions on the nationalities of the individuals manning the yacht, and where the yacht may sail to.

What are the Advantages of Registering a Commercial Yacht under the Malta Flag?

  1. No trading restrictions imposed on Maltese registered commercial yachts.
  2. Fast crew-acknowledgement certification process with STCW endorsements processed within a maximum period of three months from acknowledgement.
  3. A VAT deferment can be obtained, when a yacht to be used for a commercial operation, is imported into Malta. This means that no VAT outlay will occur which provides the owner with a significant cashflow benefit. The yacht owner will also be able to recover VAT incurred on goods and services used, during the chartering operations.
  4. When a shipping organisation licensed in Malta sells a yacht, no Malta tax is liable.
  5. On the sale of shares in a yacht owning company by a non-Maltese resident owner, no capital gains tax will arise as this is exempt under Malta Tax Law.

Requirement for a Malta Registered Agent

When an owner is a non-Maltese entity, a Malta resident agent needs to be appointed. Dixcart Malta offers this service and is very experienced in representing international owners in Malta.

A resident agent, such as Dixcart Malta will provide the following services:

  1. The channel of communication between the international owner and the Maltese Government departments and authorities.
  2. The signing and filing, of all declarations and forms required by Maltese law, with Maltese Government departments and authorities, on behalf of the international owner.
  3. Acting as the judicial representative of the international owner for judicial proceedings in Malta.

At Dixcart Malta we have a department consisting of qualified accountants and lawyers dedicated to Resident Agent Services and are able to assist with your Maltese Yachting related needs.

Additional Information

For further information about Malta Maritime services please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com.

The Key Principles and What you Need to Know Today About Marine Insurance 

Posted on | by James Navarro | Leave a Comment on The Key Principles and What you Need to Know Today About Marine Insurance 

Malta and the Marine Sector Plus a Definition of Insurance

Malta has a long, rich maritime history and has the largest shipping register in Europe. Insurance is a topic that requires a detailed understanding of the options available, by the companies operating in this sector and professional advisors such as Dixcart Malta.

The contract of insurance is a contract under which one person (the insurer) is legally bound to pay a sum of money or its equivalent to another person (the insured), upon the happening of a specified event involving some element of uncertainty as to time or likelihood of occurrence, which affects the insured’s interest in the subject-matter of the insurance.
The objective is to indemnify the insured against losses attributed to marine adventure. The three main principles of marine insurance are: indemnity, insurable interest and utmost good faith.

The First Principle of Indemnity

The principle of indemnity, in the context of insurance, essentially has two elements:

  1. To ensure that the amount compensated or reimbursed shall not increase the assets of the insured in any way. An insurance policy can never be a source of benefit or profit for the insured;
  2. The amount of compensation or reimbursement should never exceed the value of the policy taken. The amount which has been agreed upon by the insured and the insurer, if any, is the upper limit of the compensation to be paid.

The Second Principle of Insurable Interest

This second principle is made up of the following:

  1. financial loss;
  2. the loss was caused by the peril insured against;
  3. the subject matter was covered by the policy;
  4. insurable interest.

An insurer normally requires:

  • The assured may benefit by the safety or due arrival of insurable property or be prejudiced by its loss, damage, or detention in respect of which he/she may incur liability;
  • The assured stands in a legal or equitable relationship to the adventure or to any insurable property at risk in such adventure; and

The benefit, prejudice or incurring of liability referred to in the first bullet point above, must arise in consequence of the legal or equitable relationship referred to in the second bullet point.

The Third Principal of Utmost Good Faith

The third and final principal of utmost good faith is embodied in The Marine Insurance Act.

A contract of marine insurance is a contract based upon the utmost good faith, and, if the utmost good faith is not observed by either party, the contract may be voided by the other party. The duty of utmost good faith requires both parties to ensure proper disclosure of all material circumstances and to avoid making misrepresentations about material facts, circumstances or beliefs.

If utmost good faith is shown not to have been observed by either party, the statutory duty enables the aggrieved party to rescind the contract ab initio, thereby restoring the parties to the position they were in, as if they had not entered into the contract.

The Courts have consistently ruled against allowing the insured’s duty of good faith, to be used by the insurer as an instrument to enable the insurer him/herself to act in bad faith. For the insurers to succeed in avoiding the contract, due to non-disclosure during the performance of the contract, the insurers would have to show that the claim was made fraudulently.

Types of Marine Insurance

The four main types of Marine Insurance are:

1.            Hull insurance: insurance of the vessel with its gear.

2.            Cargo insurance: insurance of goods carried by sea.

3.            Insurance against the liability of the carrier; protection and indemnity (P&I Clubs); 

              compulsory or mandatory insurance, voluntary insurance (e.g. liability for cargo).

4.            Other types of marine insurance; freight, salvage expenses and general  average

               contributions, insurance of containers, shipyards, oil rigs (“energy”), etc.

The Marine Insurance Policy

The contract must be in a policy that specifies: the name of the insured, the subject-matter, the risks, the voyage or period of time covered by the insurance, the sum insured, and the name of the insurer. It must also bear the signature of the insurer or his/her representative.

A policy is voided when there is:

  • Any implied condition as to the commencement of risk: the adventure shall be commenced within a reasonable time, otherwise the insurer may avoid the contract.
  • Alteration of port of departure: the risk does not attach and the insurer may avoid the contract.
  • Sailing to different destinations: the risk does not attach.
  • Change of voyage: the insurer is discharged from liability as from the time of the change. Manifest intention to change the voyage is sufficient. This must be a voluntary change of destination.
  • Deviation: the insurer is discharged from liability as from the time of deviation. Where there are several ports of discharge, these must proceed in the order designated by the policy. If not then there is a deviation.
  • Delay: the adventure must be commenced within a reasonable time period.

There are various ‘excuses’ for deviation or delay, the main ones being: lack of authorisation (“held covered” provisions), the safety of the ship, saving human life, and events beyond the master’s control.

Additional Information

For further information about the Malta Maritime matters please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com.

Alternatively, please speak to your usual Dixcart contact.

Malta Aircraft Registration Cleared for Take-off

Posted on | by Akiko Design | Leave a Comment on Malta Aircraft Registration Cleared for Take-off

Background

Malta’s strategic geographical position has assisted its aviation industry to present numerous economic opportunities, for many years. The importance of the Malta aviation sector has led the Maltese Authorities to strengthen its aviation framework to further enhance aircraft registration and aircraft operator licensing.

Malta and the Aircraft Registration Act

Malta has aimed to position itself as one of the primary aviation hubs in the EU by continually reviewing and bolstering its aviation registry. The available aviation legislation provides the aviation industry with a solid foundation. This is further complemented by; competitive aviation registration costs, the authority’s practical understanding of the aviation sector, and favourable corporate structures. As a result, the aviation framework provides several benefits to individuals seeking to register an aircraft on the island.

The importance of Malta’s flag has already been proved within the aviation industry and the inception of the Malta Aircraft Registration Act in 2010, positioned Malta as having one of the most reputable aircraft registers, within the aviation sector.

The Aircraft Registration Act has helped to enhance the aviation framework on the island. Malta has also implemented the ‘Cape Town Convention in Interests in Mobile Equipment’ and its ‘Aircraft Protocol’. Malta took additional measures to boost the aviation industry in 2012, by establishing the Safi Aviation Park, providing a number of aviation services, including training and repairs.

Benefits of Aircraft Registration in Malta

There are many benefits and innovative concepts relating to aircraft registration in Malta.

Amongst these, as mentioned above, was the enactment of the Aircraft Registration Act (Chapter 503, Laws of Malta), which came into force on 1st October 2010. This new regime was implemented to regulate the registration of aircraft, mortgages, and other securities relating to aircraft.

  • In terms of Maltese legislation, an aircraft may be registered by; an owner who operates an aircraft, or an owner of an aircraft under construction (or an aircraft temporarily not being used or managed), or an operator of an aircraft under  temporary title (subject to certain conditions), or a buyer of an aircraft under a condition of sale or title reservation agreement.

Additional benefits include:

A. More visibility of rights and interests in relation to aircraft, through the updating of the National Register;

B. Incentives to encourage the development of finance and operating leases relating to aircraft. Legislation provides clear rules on the tax treatment of the finance charge, available tax deductions to finance lessors, and capital allowances for lessees;

C. Broader registration options, extending to aircraft under construction or temporarily not in service and aircraft under a temporary title;

D. Recognition of fractional ownership of aircraft;

E. No withholding tax on lease payments where the lessor is not a tax resident of Malta;

F. Competitive minimum depreciation periods for aircraft;

G. The private use of an aircraft by an individual who is not resident in Malta and is an employee/officer of an employer/company/partnership, whose business activities include the ownership/leasing/operation of aircraft used for international transport, does not constitute a taxable fringe benefit.

H. Legislation implementation including the provision of the Cape Town Convention on ‘International Interests in Mobile Equipment’ and its ‘Aircraft Protocol’, thereby granting secured lenders more protection and more effective remedies whilst also enabling lower borrowing costs.

Tax, Standards and Flexibility Advantages of Private and Commercial Aircraft Registration in Malta 

Tax

Since 2007, Malta has offered an attractive corporate tax system whereby non-residents can claim tax refunds. In practical terms, the standard 35% corporate tax rate is often effectively reduced to between 0% and 5%.

If you are considering aircraft registration in Malta, another tax benefit is that income, from the international transport of goods and passengers outside the country, is exempt from Maltese tax.

As an EU member state since 2004, the Maltese aircraft register permits free circulation of aircraft in the eurozone, which allows tax-free commercial operation.

VAT Treatment

The VAT treatment for aircraft leasing makes Malta an attractive jurisdiction for private and commercial aircraft registration, whilst ensuring full adherence to EU laws and regulations. The rules take into account the amount of time spent by an aircraft within EU airspace.

The imposition of VAT in Malta varies according to how an aircraft is used. The key differentiation is between, an aircraft being used by an airline operator mainly for ‘reward’ in relation to the international transport of goods or passengers, or an aircraft that is being used purely for private use.

VAT implications, such as those applicable in other EU member states, are also relevant in relation to; importations, intra-community acquisitions, and/or supply of aircraft. The intra-community purchase, importation or supply of aircraft destined for use by an airline operator chiefly for international transport of passengers or goods is classified as an exempt credit supply.

The following are additional exempt credit supplies:

(a) Supplies of equipment to constructors, owners, or operators of an aircraft;

(b) Supplies of services consisting of the modification, maintenance, chartering and hiring of an aircraft.

The VAT treatment applies to all aircraft, other than those used by airline operators for international traffic, as a VAT exemption applies in this latter case.

According to Malta’s VAT legislation, the lease of an aircraft, which airline operators do not use for international traffic, is the supply of a service subject to VAT, with the right of deduction of input VAT by the lessor.

In terms of the VAT simplification procedure, the portion of the lease that will be subject to VAT, depends on the amount of time that the aircraft is used in EU airspace. As it is difficult to identify the movement of a plane in advance and the period in which the aircraft will be operated in EU airspace, Malta applies an ‘expert technical test,’ to estimate the portion of the lease that will be subject to VAT. The standard Malta VAT rate of 18% is applicable on the established percentage of the lease that is deemed to be related to the use of the aircraft in EU airspace.

In addition, Malta offers a very solid legislative environment, with an extensive double-tax treaty network and transparency of rights and interests.

Standards

Falling under the jurisdiction of the European Union Aviation Safety Agency (EASA),  the Maltese aircraft register implements some of the highest levels of regulation in the world. Aircraft registration in Malta offers business jet owners peace of mind, with its International Civil Aviation Organisation (ICAO) rating, testament to stringent safety and security standards.

In addition, Malta adheres to the Cape Town Convention on ‘International Interests in Mobile Equipment’, which specifies international standards for leases, security interests and the registration of contracts.

Flexibility

Aircraft registration in Malta offers unparalleled flexibility for international operators. Aircraft on the Maltese aircraft register can be based and freely operated from anywhere globally.

It is also possible to add an aircraft that is currently under construction or ‘out of action’ to the Malta aircraft register.

Aircraft registration in Malta allows operators to take advantage of fractional ownership of a single aircraft. The potential benefits are enormous, with several co-owners being able to detail a percentage stake, each financed by a separate creditor.

How Can Dixcart Help?

Through our team of experienced professionals, Dixcart Management Malta Limited will assist you in all aspects of registering your aircraft in Malta. Services range from incorporation of the entity owning the aircraft in Malta and full corporate and tax compliance, to the registration of the aircraft under the Maltese Registry, whilst ensuring full compliance with Maltese Aviation legislation.

Additional Information

If you would like further information regarding Aircraft Registration in Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com, at the Dixcart office in Malta or to your usual Dixcart contact.