VAT Treatment Of Aircraft Leasing

The Maltese Value Added Tax Department issued guidelines on the VAT treatment of the private leasing of aircraft. The guidelines prescribe a VAT treatment that is broadly similar to that applicable in respect of yacht leasing. The main difference between the VAT treatment of aircraft and yacht leasing transactions refers to the manner in which the extent of use and enjoyment within the EU is determined. In the case of yacht leasing transactions, the use and enjoyment extent is determined by reference to the length of the vessel and method of propulsion whereas in the case of aircraft leasing, use and enjoyment within the EU depends on the aircraft's Range and Maximum Take-Off Mass (MTOM).