NEW MEANS OF TRANSPORT

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DEFINITION

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Motorised land vehicles the capacity of which exceeds 48 cc or the power of which exceeds 7,2 kw

• supplied not more than 6 months after the first entry into service or

• that have not travelled more than 6.000 km

Land vehicles

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Vessels exceeding 7,5 meters in length

– supplied not more than 3 months after the first entry into service or

– that have not sailed for more than 100 hours

Exception: vessels used for navigation on the high seas and carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities

Vessels

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Aircraft the take-off weight of which exceeds 1.550 kg

• supplied not more than 3 months after the first entry into service or

• that have not flown for more than 40 hours

Exception: aircraft used by airlines operating for reward chiefly on international routes

Aircraft

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Intended for the transport of passengers or goods

Transport

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INTRA-COMMUNITYACQUISITION

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• Always subject to VAT in Malta

– Whatever is the quality of the vendor (never treated as a second-hand goods…)

– Whatever the qualifications of the acquirer (taxable person, non-taxable legal person, private individual)

– (Even if there is no transaction)

– Without the application of any threshold

– Distance sales regime never applicable

Art. 4(1)(b) VAT ActArt. 4(1)(b) VAT Act Item 2(a) Part Two Sixth Schedule Item 2(a) Part Two Sixth Schedule

Subject to VAT

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ICA made by a taxable person registered under article 10 not asking for a registration of the means of transport at his name, that is to say that the car is used:

• for the purpose of resale, whether in the state in which they were acquired or after treatment or processing or inclusion in other goods supplied by that person, in the normal course of that person's economic activity

• (for the purpose of being used in the normal course of that person’s economic activity)

Payment of VAT in the regular VAT return

Payment of VAT: taxable person art.10 (no registration at his name)

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ICA made by a taxable person registered under article 10 asking for a registration of the means of transport at his name, which includes:

• for the purpose of the carriage by that person of goods or passengers for a consideration

• for the purpose of being provided by that person under a charter or hire agreement

• for the purpose of being provided by that person for hire with a driver or for self-drive hire or of being used for driving instructions, provided they are so used, in each case, in the normal course of that persons’ economic activity

• for the purpose of being used in the normal course of that person’s economic activity or for private purposes

Payment of VAT: taxable person art.10 (registration at his name)

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This person must:

• submit a special return furnished by the customs office

• prove to this customs office that he is registered under article 10 of the VAT Act and is liable to pay VAT according to article 21(1) of the VAT Act through his VAT return

  A copy of this special return as well as the proof of payment, if any, must be submitted to the competent registration office at the same time as the demand for registration of the means of transport

Payment of VAT: taxable person art.10 (registration at his name)

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ICA made by any other person than a taxable person registered under article 10

This person must:

present the means of transport to a customs office of its choice, with the invoice as

well as all the documents necessary to check if the information reported on the

invoice is correct, that is to say order forms, contract, transport and payment

documents related to the means of transport, not later than the fifteenth day of the

month following that during which the intra-Community acquisition occurs

submit a special return furnished by the customs office

pay to the customs office, not later than the fifteenth day of the month following

that during which the intra-Community acquisition occurs, the value added tax due

on the intra-Community acquisition

Payment of VAT: other person than a taxable person art.10

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ICA made by any other person than a taxable person registered under article 10 (continued)

  A copy of this special return as well as the proof of payment, if any, must be submitted to the competent registration office at the same time as the demand for registration of the land vehicle, the vessel or the aircraft

Payment of VAT: other person than a taxable person art.10

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INTRA-COMMUNITYSUPPLY

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Acting in the framework of his economic activity

– Always exempt from VAT if transport is proven

– Whatever the qualifications of the acquirer (taxable person, non-taxable legal person, private individual)

Art. 9 VAT ActArt. 9 VAT Act

Item 3(1) or (2) Part One Fifth Schedule Item 3(1) or (2) Part One Fifth Schedule

By a taxable person art.10 acting as such

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• Supplier becomes in any case a taxable person for this supply

• Supply exempt with right to deduct VAT (refund)

• Refund is however limited to the tax that would be chargeable if the supply by him of the means of transport were a taxable supply

• Moreover, refund is in any case limited to the VAT paid on the purchase made by the vendor

Art. 5(4) and 25(1) VAT ActArt. 5(4) and 25(1) VAT ActItem 3(2) Part One Fifth Schedule Item 3(2) Part One Fifth Schedule

By another person than a taxable person art.10

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– A Maltese private individual purchases a car for 25,000 liri + VAT (18%) = 4,500 liri

– He sells the car to an Italian private individual after 5 months (10,000 kilometers) for 30,000 liri. The car is transported to Italy.

– The Italian VAT is due by the Italian private individual = 30,000 liri in EUR X 20%

– The Maltese private individual can deduct Maltese VAT paid on the purchase up to 30,000 liri x 18% = 5,400 liri but the deduction will be limited to 4,500 liri

The Maltese private individual becomes an occasional taxable person for this operation

Example: intra-Community supply by a private individual