Brussels calls on Malta’s government to modify VAT calculation system

The conference Opportunities in Superyachts 2017 will be held on February 23 at the Excelsior Hotel in Valletta, Malta

Brussels claims that Valetta has failed to properly modify its tax system

The European Commission has sent an additional letter of formal notice to Malta whose authorities it accuses of not levying the correct amount of the value-added tax (VAT) on the lease of yachts. Brussels claims that Valetta failed to properly modify its tax system in response to earlier requests by the EC.

“Following an initial letter of formal notice on 8 March 2018, Malta modified its legislation in order to align it with the necessary requirements under EU law. These new national rules are, however, still not completely in line with EU law,” the EC said in a statement.

According to Brussels, Malta’s legislation uses a distance-based method to calculate the effective use of a yacht outside the EU, but the bloc’s use does not allow such a method to be used for this purpose. Instead, a time-based method is to be applied.

“The Commission is now sending a complementary letter of formal notice to Malta in order to ensure full compliance with EU law. Without a satisfactory response within two months, the Commission may decide to address a reasoned opinion to Malta,” the EC said.