Joseph Borg, Senior Advisor, and Alice Taylor, Practice Coordinator, have recently written about Aviation Law in Malta in the June issue of the AirMalta inflight magazine, Bizzilla.  They give an overview of the legislation and the steps to take to register aircraft in Malta.

Maltese Law

The Maltese Islands have long served as a hub for international travel and business, due in part to their strategic location between two continents and their reliance on aviation to support the lucrative tourism sector. Recent years have seen the development of legislation and regulations designed to complement its economic development strategy and to encourage growth in the aviation industry.
The legislation applicable to aviation in Malta includes the Aircraft (Application of Laws) Ordinance, the Civil Aviation Act, Civil Aviation (Security) Act and the Aircraft Registration Act which was published in 2010. Malta’s attractive regulatory framework along with its EU membership and geographical benefits has rendered the country an extremely popular location for aircraft registration.

Aircraft Registration

For a person to register an aircraft, several conditions must be met. Such person must be a citizen of or an undertaking registered in the European Economic Area (EEA) and must also be resident in one of those areas. The latter must also be controlled, owned and with the main place of business within the EEA as well. International registrants (for private aircraft only) must enjoy a legal capacity, appoint a resident agent, comply with the applicable regulations and guidelines and must reside in an approved jurisdiction for them to be qualified for registration.

Aircraft Leasing

One of the most attractive incentives offered by the Maltese regulatory regime relates to aircraft leasing for both private and commercial aircrafts. Over the past few weeks, changes to the VAT guidelines on aircraft leasing have only made the regime even more attractive, mainly since through a simplification procedure for the calculation of the use of the aircraft within the EU airspace. The minimum percentage of time that an aircraft could be deemed to be in the EU airspace is 30%, therefore potentially reducing the effective VAT rate to 5.4%.

To qualify for the simplification procedure, some specific conditions must be met. Such conditions include that:

  • the lessor must be registered with the Malta VAT department and can deduct input VAT, where applicable
  • the lessee cannot claim the input VAT in respect of the lease
  • there must be a lease agreement between the parties, which agreement cannot be for a period exceeding 60 months
  • the rent must be payable on a monthly basis

WH Partners assist with the sale and purchase of aircraft, their registration, finance, leasing and providing advice on all tax matters and mortgages.