On 31 January 2024, Malta’s Commissioner for Revenue issued Guidelines for the application of the 12% VAT rate on the hiring of pleasure boats. This follows after the recent amendments to the Value Added Tax Act, which extended the 12% VAT rate to pleasure boat rentals starting from 1 January 2024. These guidelines clarify applying the 12% rate with examples.
The guidelines also address applying the 12% rate when a package for hiring a pleasure boat includes other supplies with different VAT treatments. In such cases, the 12% rate can be applied to the entire package as a composite supply, provided that the primary service is hiring a pleasure boat and specific conditions are fulfilled.
The reduced rate of 12% shall not apply to the provision for consideration of seating or space on board a pleasure boat along with other passengers to whom such seating or space is separately supplied for consideration and other such supplies.
