There are many benefits and innovative concepts related to the registration of aircraft in Malta.
Pursuant to the enactment of the Aircraft Registration Act (Chapter 503, Laws of Malta) which entered into force with effect from Friday 1st October 2010, a new regime has been implemented to regulate the registration of aircraft, mortgages and other securities over aircraft and the implementation of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol, which Malta has also obtained.
In terms of Maltese legislation, an aircraft may be registered by an owner who operates an aircraft, an owner of an aircraft under construction or an aircraft temporarily not being operated or managed, an operator of an aircraft under temporary title, subject to certain conditions, as well as a buyer of an aircraft under condition of sale or title reservation agreement.
There are many benefits and innovative concepts related to the registration of aircraft in Malta which include:
- More visibility of rights and interests in aircraft through the updating of the National Register;
- Incentives to encourage the development of finance and operating leases of aircraft. New legislation provides clear rules on the tax treatment of the finance charge, available tax deductions to finance lessor and capital allowances for lessees;
- Broader registration possibilities, extending to aircraft under construction or temporarily not in service, and aircraft under a temporary title;
- Recognition of fractional ownership of aircraft;
- No withholding tax on lease payments where the lessor is not a tax resident of Malta;
- Competitive minimum depreciation periods for aircraft;
- The private use of an aircraft by an individual who is not resident in Malta and is an employee/officer of an employer/company/partnership whose business activities include the ownership/leasing/operation of aircraft used for international transport does not constitute a taxable fringe benefit;
- The new legislation implements the provisions of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol thereby granting secured lenders more protection and more effective remedies whilst allowing lower borrowing costs.
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