Taxation of Aircrafts in Malta Shanice Finch
tax advisor for Erremme Business Advisors Limited sfinch@easl.com.mt
In recent years, Malta has become a pioneer with respect to the field of registration, leasing and maintenance of aircrafts. The Government`s contribution through the update of the local aviation legislation, led to a rapid growth in the registration of Aircrafts with the Civil Aviation Directorate. As at March 2019, the number of registered Aircrafts with the National Aircraft Register has seen an exponential growth of 307 compared to 60 locally registered aircrafts in Malta in the last 10 years. Malta enacted the Aircraft Registration Act (ARA) in 2010 with the main focus of boosting the registry for both commercial and private aircrafts. The 2010 Act also implements provisions on the Aircraft Protocol into Maltese Law and provisions adapted from the Convention on International Interest in Mobile Equipment held on November 2001 in Cape Town. In recent years, Malta has become a leading jurisdiction of choice with respect to Aircraft maintenance contributed mainly by Aviation Cosmetics Limited, Lufthansa Technik Malta and Maleth-Aero AOC Limited. From a taxation point of view, the local legislation includes advantageous refund contributions both on a corporate and also on a personal level. Certain management positions in the field of the Aviation industry can opt to a personal tax rate of just 15%. Moreover, a total tax exemption from Maltese tax is available on fringe benefits received by non-resident employees or officers for making private use of an aircraft and also to companies and partnerships trading in the ownership, leasing or operation of aircraft used in the international transport of passengers or goods. The first tax advantage at company level is the full imputation tax system eliminating economic double taxation in the hands of the individual shareholders at dividends stage. The benefit is that the shareholders will be able to claim back the full tax on dividends paid by the company resulting in no extra tax leakages in the hands of individual shareholders.
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executive traveller ďƒ˜ MACE issue
