Why is Malta a jurisdiction of choice for aircraft registration?
Amongst all of the blockchain/iGaming and FinTech hype that is prevalent in Malta, people sometimes forget that the country is also a prime jurisdiction for various other types of business. Malta is well known for its long history with the maritime sector, but have you also known that it offers great incentives for those individuals or businesses that are looking to register an aircraft?
In 2010, The Aircraft Registration Malta Act came into force with the aim of regulating the aviation industry in Malta. The Act focused on the registration and enforcement of aircraft mortgages, the interface of aircraft protocol with Maltese law, as well as the implementation of the Cape Town Convention.
So what are the main advantages of registering an aircraft in Malta?
Malta offers an attractive corporate taxation regime including a full imputation system on the distribution of dividends meaning the rate of tax paid can be as low as 0% in certain circumstances.
Malta is part of an extensive network of double taxation treaties.
Malta encourages the development of both finance and operating aircraft leases as well as clarity on the tax treatment of final charges, tax deductions and capital allowances.
Malta does not charge withholding tax on lease payments as long as the lessor is not a Malta tax resident.
Malta does not consider that the use of aircraft by a person who is not resident in Malta and is not an employee of, or involved with a company which owns, leases, or operates aircraft, is a taxable fringe benefit.
Malta offers a broad range of registration possibilities for aircraft that are registered privately and not for commercial use.
Malta offers owners to register an aircraft whilst it is still under construction.
Malta recognizes fractional ownership of aircraft so the title can be effectively divided between numerous co-owners into fractions or percentages which can each be financed by different creditors.
Malta offers a wide range of top-quality airline services such as maintenance, repair, overhaul, management, training and other ancillary services, all within the country.
In Malta, an owner operating an aircraft, an owner of an aircraft under construction, the owner of an aircraft currently not being operated, the owner of an aircraft under a temporary title, or a trustee is able to register an aircraft in Malta.
If you are interested in registering a commercial or private aircraft in Malta, contact us today by sending us an email on [email protected]
Singapore Airlines launches a decentralised air miles programme
Singapore Airlines has officially launched its blockchain-based loyalty programme for frequent flyers.
A digital wallet called KrisPay was developed in collaboration with KPMG and Microsoft and it allows customers of Singapore Airlines to turn travel miles into units of payment. These units can then be spent with partner merchants throughout Singapore. The best bit about the project, however, is the fact that the KrisFlyer programme works via the blockchain in terms of underpinning the clients’ loyalty wallets.
Any customer that signs up for the programme is able to download the application on their mobile device before turning their air miles into KrisPay units. They can then use these units to pay for a range of products and services by scanning a QR code at the point of sale.
So far, Singapore Airlines have announced 18 partners in Singapore such as bars and restaurants, beauty salons, petrol stations, and shops including LEGO. They are expecting the onboarding of more partner merchants in due course and the airline will be offering discounts for users that adopt the programme in its early stages.
The KrisPay programme was announced back in February after conducting various successful proof-of-concept trials with KPMG and Microsoft. Days ago, the airline was announced as the best airline in the world by Skytrax in London and they have fought off stiff competition from the previous winner, Qatar airlines.
But this is not the first example of airlines using blockchain technology. One year ago, Russia’s biggest airline S7 announced that it would be issuing tickets over the Ethereum blockchain with support from Alfa Bank, the countries largest banking institution.
Due to these two proven use-cases, it is expected that many other airlines will look to adopt blockchain technology into various aspects of their operations.
Hi Fly registered the largest Airbus to date – A380 in Malta
E&S Group is excited to announce that its client Hi Fly has purchased the largest Airbus – A380.
Our client, Hi Fly, has registered the largest aircraft to date in Malta, Airbus A380.
Being the largest widebody aircraft wet lease, Hi Fly has a number of aircraft registered with the Malta Aircraft Registry. Hi Fly praises itself on its wet lease services, offering short, medium and long-term contracts to airlines, governments, tour operators, companies and individuals.
The European manufacturer Airbus designed Airbus 380 to compete with their American competition, Boeing. This double-deck, wide-body, four-engine jet airliner is the world’s largest passenger airliner. Airports have to be fully equipped with adequate facilities to accommodate such airline.
If you would like to register your aircraft in Malta, E&S Group is here to help. We offer step by step procedures to register your aircraft in Malta, please visit this link here. You can contact us at [email protected] or +356 2010 3020.
New legislation has entered into Malta’s aviation industry in relation to qualifying employment. The Inland Revenue Department has issued a list of those roles which are considered qualifying. Although the rules came into force on the 24th May 2016, the applications are now available. One should note that the rules apply to individuals not domiciled in Malta.
Individual income from a qualifying contract of employment qualifies under these rules when it is received by a beneficiary in an eligible office. Such income is subject to tax at a
flat rate of 15% provided that the income amounts to at least 45,000 euros (forty-five thousand euros) annually. The 15% tax rate applies for a consecutive period of five years for European Economic Area (that is, EU countries as well as Norway, Iceland and Liechtenstein) and Swiss nationals and for a consecutive period of four years for third country nationals.
Before applying for this scheme one has to consider all the conditions laid out in the law in order to benefit from the 15% tax.
On the 5th of April 2016, Maltese VAT Department issued its new guidelines in respect to the VAT treatment for aircraft leasing by which a Maltese structure benefits from a significantly lower effective rate of VAT.
For VAT purposes, except for aircraft used by airline operators in international traffic, the lease of an aircraft is a supply of a service which is subject to VAT with the right of deduction of input VAT by the lessor. This service is taxable according to the use of the aircraft attributed within the airspace of the European Union. Since it is rather difficult to identify the time spent in European Union Airspace in advance, VAT department in Malta has issued the following guidelines for the established percentage proportions according to the maximum range of the aircraft:
Aircraft type by Range (KM)
% of lease taking place in the EU
Computation of VAT
60% of consideration x 18%
3,000 – 4,999
50% of consideration x 18%
5,000 – 6,999
40% of consideration x 18%
7,000 – upwards
30% of consideration x 18%
These changes will result in the lower effective rate of VAT for a large number of business aircraft.
In order to apply these treatment the following conditions shall apply:
· The leasing structure requires both the lessor and lessee to be established in Malta.
· The lease shall not exceed a period longer than 60 months.
· The lease payments must be made monthly, and VAT paid every quarter.
· At the end of the lease, the lessee may opt to purchase the aircraft at a percentage of the original cost.
· If the Lessee exercises the option to purchase the aircraft, a VAT paid certificate will be issued as long as all the VAT due under the lease has been paid.
· The Commissioner for Revenue in Malta has the right to request the lessor to submit details of the use of the aircraft.
· Prior approval of the value of the aircraft and the applicable percentage of the lease subject to VAT shall be obtained in writing from the Commissioner for VAT.