In April, 2016 the VAT Department of Malta announced a simplification of the VAT treatment for the leasing of private jet and turbine aircraft and helicopters in Malta.
The simplification hugely increases the attractiveness of the Malta aircraft leasing system for the EU importation and operation of private aircraft particularly when combined with the benefits of the Isle of Man aircraft register.
Under the simplified guidelines issued by the Malta Department of VAT the VAT chargeable on the lease of an aircraft is based on the range of the aircraft concerned as follows:
|Aircraft range (km)||Community use %||Effective VAT rate*|
*The effective VAT rate is based on the current Malta standard VAT rate of 18%
Oceanskies have developed in conjunction with their Malta based corporate partner a fully inclusive aircraft leasing package established in Malta that is not only fully compliant with the simplified leasing regime laid down by the Malta Department of VAT but also provides aircraft owners with the benefits of Isle of Man aircraft registration which is the world’s leading register for the private and corporately operated aircraft and helicopters.
The Oceanskies package is provided on an all inclusive fixed fee basis based on the work involved as opposed to a percentage of aircraft value.
The key stages of the Oceanskies Malta Leasing structure are as follows:
- Incorporation of aircraft owning company (the Lessor) and aircraft leasing company (the Lessee) in Malta by our Maltese based independent company formation and administration partner that is fully licensed by the Malta Financial Services Authority (MFSA).
- EU VAT registration of the Lessor in Malta. All Maltese aircraft leasing arrangements must be approved on a case-by-case basis by the VAT Department of Malta.
- Lessor contracts for the build or purchase of the aircraft which will be registered in the name of the company by Oceanskies in the Isle of Man with an M- prefix followed by four letters chosen by the client, i.e. M-OSKY.
- The aircraft is delivered to the Lessor in Malta where Oceanskies will welcome the aircraft and arrange ground handling through our partner FBO at Luqa airport (ICAO: LMML) and we will attend to all arrival formalities including customs clearance and, if necessary, EU importation and VAT deferment.
- Following arrival and, if necessary, the EU importation of the aircraft in Malta the lease of the aircraft will be initiated by the Lessor to the Lessee.
- The lease agreement is provided by Oceanskies and will be a dry lease whereby the Lessor effectively places the day to day operational responsibility of the aircraft with the Lessee who would then, for example, be expected to be responsible for its operation and the payment of running expenses and the provision of flight crew.
- Following the commencement of the lease the aircraft will leave Malta under the control of the Lessee.
- The aircraft will then enjoy free circulation within the EU. After the end of the Lessor’s first VAT accounting period Oceanskies will obtain a letter from the Malta VAT Department confirming that the Lessor is properly accounting for VAT on the lease of the aircraft.
- The lease would usually run for a minimum period of one year to a maximum of five years.
- Although there may be an option for the Lessee to purchase the aircraft at the end of the lease period at a percentage of the original price any final purchase that may occur is strictly an option which may or may not be exercised by the Lessee.
- If the purchase option is exercised the aircraft will be required to return to Malta whereupon Oceanskies will again be on hand to welcome its arrival and arrange for its subsequent sale by the Lessor to the Lessee whilst parked in Malta.
- Oceanskies, as part of its complete Malta leasing package, will handle the issue of the Bill of Sale and transfer of ownership on the Isle of Man aircraft register and arrange for the production of a Certificate of VAT Paid Status by the VAT Department of Malta once all VAT due has been paid.
- The Certificate of VAT Paid Status then becomes evidence of the VAT paid status of the aircraft.
We encourage both existing and potential aircraft owners who might be interested in incepting a Maltese leasing arrangement to request a free no obligation quotation. Please do not hesitate to contact us either by using the message form below or by email to: email@example.com