The aviation industry has been growing steadily with a solid legal foundation. Malta’s benefits to the aviation industry are geographical, reputational, and financial.
Malta is the best home for your aircraft. Our experts are ready to guide you through multiple services.
- Fiscal Benefits of the Aviation Industry in Malta
- The Benefits of Aircraft Registration in Malta
- Aviation and Aircraft Registration Services
Fiscal Benefits of the Aviation Industry in Malta
The fiscal benefits stimulate growth in local aviation. Measures include the participation exemption regime, the tax refund mechanism, the absence of withholding taxes on outbound dividends, the exemption on interest and royalties derived by non-residents, the extensive double taxation treaty network and other forms of double taxation reliefs.
Additionally, all income derived from the ownership, lease and operation of an aircraft engine used for the international transport of goods or passengers are deemed to arise outside Malta. Tax treaties are generally based on the OECD model. The income derived from aircraft operated in international traffic is generally taxable only in the state where the effective management of the enterprise is situated.
You can benefit from a complete imputation system of taxation, the absence of withholding tax on outbound payment of dividends and interest, and refunds of tax paid to non-resident shareholders.
The Benefits of Aircraft Registration in Malta
Malta has been steadily increasing aviation activity over the last few years. The Malta Aircraft Registration Act of 2010 is the primary source of Maltese Law on aircraft registration, and the advantages include the following:
- Registering the aircraft under construction once the craft is uniquely identifiable.
- Recording details about the aircraft, its ownership or any other relevant interests.
- Registering an “international interest” according to which security interests are created and their priority ranked.
The competitive aviation registration and renewal costs complement the benefits within a well-regulated and high-quality eco-system. It is also supported by an attractive corporate tax system and fiscal benefits.
Malta/EU/EEA/Swiss citizens can be aircraft registrants, provided they are residents or business owners in Malta. For non-residents, registration will require appointing a resident agent in Malta in order to represent the owner in Malta for matters concerning the registration of the aircraft.
Aviation and Aircraft Registration Services Include:
1. Air Operators’ Certificates
All aircraft operators engaged in Commercial Air Transport activities must have an Air Operator Certificate (AOC) and an Air Operating Licence. Certification is accomplished over five phases under the auspices of the Civil Aviation Directorate. We can guide you through the process, the professional and organisational structure required, and throughout all process stages.
2. VAT leasing structures
The VAT leasing structure reduces the percentage of charge on the value of the aircraft to as low as 5.4%, calculated on the aircraft range in kilometres and the rate of community use. Commercial craft comes with its VAT-related benefit. The following are considered as ‘exempt with credit’ supply within the international transport of passengers or goods:
- Intra-community acquisition
- Importation or supply of aircraft for use by an airline operator as a reward
We can assist you through these VAT leasing structures.
3. Qualifying Employment in Aviation
The Qualifying Employment in Aviation (Personal Tax) Rules attract EEA/Swiss and third-country nationals to hold an eligible office in the aviation sector in Malta. Anyone receiving an income from an ‘eligible office’ under the Rules would be entitled to benefit from a flat tax rate of 15% provided that the income amounts to at least EUR 45,000 annually. The 15% tax rate applies for a consecutive period of five years.
The five-year period commences from the year when the individual concerned first becomes taxable in Malta. If an individual was taxable in Malta but did not benefit under this Scheme and subsequently becomes eligible under the Scheme, he/she can benefit only if the five-year period has not elapsed. The benefit is then available for the years remaining from the date of eligibility under the Scheme until the said five-year period from the date of first being subject to tax in Malta elapses. Individuals who have availed themselves of the benefit under this scheme may apply for two extensions of five years each to the qualifying period.
4. Fiscal Benefits
We have described the fiscal benefits you can derive from engaging in Malta’s aviation industry. Let us assist you in navigating and taking advantage of these fiscal benefits.