Malta has a tradition in the shipping industry, as it is one of the most important economic sectors of this country. Various types of vessels are used for numerous activities, among which fishing and leisure. With respect to the latter, registering a yacht in Malta comes with various advantages, among which some are related to taxation.
Below, our accountants in Malta explain the main tax regulations applicable in the shipping industry. We offer tailored support to those who operate in this sector and need assistance in preparing the necessary accounting papers.
The main tax regulations applicable to Maltese shipping companies
The Income Tax Act is the main law applicable to natural persons and companies operating in Malta, however, when it comes to shipping businesses, these fall under specific rules gathered by the Merchant Shipping Regulations which were last updated in 2020.
One of the most important changes refers to the obligation of these companies to file audited financial statements with the Companies Register.
Our seasoned auditors in Malta can guide foreign investors who have opened shipping companies here and need accounting and audit services.
Taxes paid by shipping companies in Malta
When it comes to the taxation of Maltese shipping companies, it should be noted that these are exempt from the corporate tax compared to businesses in other industries. However, this levy is replaced by the tonnage tax, however, under specific circumstances, exemptions apply.
In order to establish tax liability and the taxes that need to be paid by a shipping company, it should be noted that it must define the activities such a business carries out. These are:
- international carriage of goods by sea;
- international carriage of passengers by sea;
- chartering activities carried out by these companies;
- operations of ships engaged in all the activities presented above.
The tonnage tax consists of a levy paid on annual basis and a registration fee that must be paid with the Malta Shipping Registry. The levy is calculated based on the tonnage of the vessel.
The European Commission approved Malta’s tonnage tax regulation for a period of 10 years starting with 2018.
Our accountants in Malta can explain how the tonnage tax applies. They can also help with the financial documents that need to be prepared by those operating such companies.
Financial documents that need to be filed by Maltese shipping companies
As mentioned earlier, a new regulation requires shipping companies to file audited financial statements starting with the financial year 2020. The submission of the documents must be made no later than 42 days after the financial year has ended in order to avoid penalties.
Exceptions from this rule apply in the case of new companies, as well as in the case of shipping companies whose first accounting period has exceeded the 12 months period from the incorporation date, case in which their annual accounts have been approved in a shareholders’ meeting.
According to the Companies Law, the directors’ report associated with the audited financial statements exemption applies in the case of small shipping companies, where these must meet at least two the following requirements:
- their balance sheets do not exceed 600,000 euros (4 million euros in the case of companies registered according to the Companies Law);
- their turnovers do not exceed 12 million euros (8 million euros in the case of businesses falling under the provisions of the Companies Law);
- they do not have more than 50 employees.
You don’t need to worry about the preparation of the financial statements for your shipping company, as our accountants in Malta can take care of this aspect. We also invite you to watch our video:
Tailored accounting services for Maltese shipping businesses
In light of the current changes in the legislation, if you need accounting services, our Maltesespecialists are at your service, so you don’t need to worry about having to comply with new regulations.
We have extensive experience in helping small and large companies in various industries, including tourism.
Considering that the maritime sector is one of the oldest and most important industries in Malta and that the country’s Ship Register is the largest registry in Europe and the 6th largest in the world, no wonder there are many foreign-operated vessels here.
Our accounting firm in Malta is at the service of both local and foreign businesspersons who operate merchant or leisure ships and can also explain how the VAT on leasing activities applies.
Do not hesitate to contact us for personalized accounting and tax filing services for your Maltese shipping company.