Malta is a signatory to the 2001 Convention on international interests in mobile equipment, the “Cape Town Convention”. In order to fulfil its obligations, under the aforementioned international convention, Malta recently introduced the 2010 Aircraft Registration Act, chapter 503 of the Laws of Malta.
Although most of the regulations that apply in respect of the field of aviation emanate from the 2010 Aircraft Registration Act, there are also a number other applicable regulations that derive from other independent legislation, such as the Maltese Civil Code and the Maltese Civil Aviation Act. Transport Malta, is considered to be the primary statuary authority responsible for the regulation of aviation in Malta, nevertheless, aircraft registration powers have been delegated to the Director of Civil Aviation.
ELIGIBILITY FOR REGISTRATION
In accordance with the provisions of the Aircraft Registration Act, an aircraft may be registered by any of the following individuals:
i. an owner operating his aircraft
ii. an owner of an aircraft under construction, or temporarily not being operated or managed.
iii. an operator under a temporary title
iv. a buyer of an aircraft under a conditional sale or title reservation or similar agreement
v. a trustee
Upon the registration of an aircraft the registrar must ensure that the following general information is provided by the registrant:
i. Physical details of the aircraft
ii. Details of the engine and the replacement engines
iii. Name, address and capacity of the registrant
iv. Details of any mortgages
v. Details of irrevocable de-registration and export requests.
TYPES OF REGISTRATION
There are essentially two main categories of registrations under the Aircraft Registration Act:
i. A Commercial Aircraft Registration
ii. A Private Aircraft Registration
In order to register a Commercial Aircraft, the registrant must either be:
- A Citizen/resident of Malta/EU/EEA/Switzerland; or,
- Qualify under Regulation 1008/2008 to hold an operating licence.
In order to register a Private Aircraft in Malta the registrant must be one of the following:
i. A Citizen/resident of Malta/EU/EEA/Switzerland
ii. A Maltese undertaking with less than 50 % of ownership or effective control in Malta.
iii. A Trustee where beneficiaries are persons mentioned above
iv. A Foreign undertaking from an approved jurisdiction provided it satisfies certain requirements in relation to legal capacity and appoints a local resident agent
In all registrations, once an international registrant has registered an aircraft in Malta, the registrant is deemed to have submitted to the jurisdiction of the Maltese courts.
APPLICABLE TAX BENEFITS
Generally all income that is remitted to Malta is taxable at 35%, nevertheless upon distribution of dividends, the shareholders are entitled to claim back a 6/7th refund, therefore having an overall effective tax leakage of 5%.
Only once income is remitted to Malta that the income is taxable in Malta. Therefore although a minimum amount of income would have to be remitted to Malta, the company may still be incorporated in a tax haven and the DTT would not have access to income earned outside of the country.
In addition, our legislation stipulates that no withholding tax obligations are applicable in respect of Maltese Lessees operating aircrafts in international transport when making lease payments to foreign lessors.
GVTH currently stand at the forefront of practice concerning the recent Aircraft Registration Act, and since the legislation was passed we have been extensively involved in research into its many facets. We are therefore now very accustomed with this area of practice and are able to offer a wealth of advice on any issues within it.