Temporary Importation Procedure available to Non-EU Yacht Owners

Another benefit for non-EU national yacht owners is the exemption of customs duties or VAT on the value of the yacht when the yacht is imported into EU waters for private use with the intention of re-exporting.

The temporary importation procedure allows the yacht to stay within the EU territorial waters for 18 months and can move freely with no further customs duties or VAT during this period. There are cases where an extension is given when the yacht is not used at the maximum overall period of 24 months as per implementing provisions of the Customs Code. Further, the temporary importation is not limited to single period thus a yacht can sail out of the EU then come back. In this case, a new period of temporary importation will be issued.

However, if the boat does not leave before the end of the allowed/operative period then customs duty and VAT become due and collectible.

Onward Supply Relief (OSR) – An Attractive Solution

Onward Supply Relief (OSR) is an exemption from VAT on the importation of goods made into Malta from a country outside the European Union (EU) by a taxable person, which goods are released into free circulation in Malta and dispatched or transported to a taxable person into another EU member state as an intra-community supply. This scheme has been an attractive solution for the yacht owners of who import yachts into the EU for a commercial use.

Onward Supply Relief (OSR) – An Attractive Solution

  • The applicant making an importation of the goods in Malta shall be a VAT registered person who performs economic activity in Malta or who operates as a broker or representative;

  • The applicant shall submit the necessary documents that the goods are being transported or dispatched to another member state outside Malta;

  • The applicant shall provide to the Director General of the Customs Department the i) invoice issued by the supplier of the imported goods from outside the territory of the EU, in which the person shall be clearly specified as a purchaser of the goods; and ii) invoice issued by the Malta VAT registered as the seller to a taxable person registered in another member state with valid VAT identification number;

  • The applicant shall complete the intrastate dispatch form, VAT return for the exempt importation and subsequent exempt intra-community supply, and recapitulative statement showing the value of the intra community supply and the VAT number of the purchaser in the other member state;

  • The Customs Department shall issue a declaration which will be processed under a Customs procedure. The goods will remain under customs supervision until the despatch of goods from Malta, which should be effected within 30 days from when the goods were put into free circulation;

  • The intra-community supply made in Malta will be reported in the VAT Information Exchange System by the Maltese VAT Department and thus the tax administration of the other member state will be notified of the transactions;

The conditions provide an effective tool to relief the immediate payment of VAT on importation of goods, whilst achieving the objective of having the yacht released into free circulation within the EU borders. Whereas any applicable customs duties are to be paid in Malta on the importation, VAT would be paid or accounted for in the member state of final destination.

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