yachting in malta: a fiscal perspective pierre portelli 11 june 2015
TRANSCRIPT
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
Purpose of Yacht Acquisition
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Private Use PrivateOwnership
Lease
Commercial Operation
YachtAcquisition
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
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Acquisition Use Disposal
Income Tax None None None
VAT 18% None None
Private Use PrivateOwnership
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
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Acquisition Use Disposal
Income Tax None Finance charge
taxable at 35%
None (no tax depreciation
allowed for lessor)
VATVAT @ 18 % -reclaimable
VAT on lease payments
effectively ranging between 5.4% and
16.2%
18%
Private Use
PrivateO’ship
Lease
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
Yacht Leasing: Effective Rates
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The effective VAT rates applicable to the VAT leasing structure are as follows:
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
Yacht Leasing - Conditions
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• Lessor must be a Maltese company - lessee can be any Maltese or foreign person (natural or legal)
• Lease payments must be every month for a period of not exceeding 36 months
• Prior approval of the lease needs to be sought from the VAT Department
• VAT Department expects a profit on the lease
• First lease payment at least 40% of the cost of yacht.
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
Yacht Leasing – Income tax Guidelines
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• The lessor charged to tax only on the annual finance charge
• The lessee is allowed a deduction in respect of the finance charge, repairs and maintenance and insurance
• Only the lessee may claim capital allowances
• Where the lessee exercises option to purchase the yacht, the purchase price shall be considered to be of a capital nature
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
Yacht Leasing – An Example
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Cost of 30 metre yacht : € 10,000,000
Total lease payments ( to cover costs and lease profit): € 10,100,000
VAT on lease payments: 18% of 30% of total lease payments: € 545,400
VAT on disposal of yacht: 18% of 1% of € 10,000,000: € 18,000
Income tax on income: 35% of € 15,000: € 5,250
Total Taxes as a percentage of cost of yacht: 5.7 %
Tax payable if yacht leasing structure not applied: 18% x € 10,000,000: € 1,800,000
Tax saved with yacht leasing structure: € 1,231,600
Total Taxes:€ 568,400
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
Acquisition Use Disposal
Income Tax None 35% Balancing
Statement
VAT 18% - refundable 18% 18%
Commercial Operation
The information contained in this slide pack is generic and brief and therefore should not be relied upon for any factual or planned transaction or event. Specific advice should be separately sought for each such transaction or event.
© 2015 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and ‘cutting through complexity’ are registered trademarks or trademarks of KPMG International Cooperative (KPMG International).
Pierre PortelliPartner
[email protected]: +356 2563 1132
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