Malta, an EU country, has flexible registration, low tax & generous fiscal rules to attract the aviation industry. Low Tax Low VAT No Import Duties 15% income tax for employees A legitimate low tax EU jurisdiction. 5% effective corporate tax rate, no withholding, capital gains or entry or exit taxes. No inheritance or wealth taxes.

1. Aviation Law
Registration & Services
Registration Requirements
Leasing & Financing
Taxation & Corporate Structuring (SPVs)
VAT - New Reduction Rules
Fringe Benefit & Income Tax Reduction
Why Malta? Aviation, highlighted by the Maltese Govern-
ment as a growth industry is actively encouraged with the
provision of very attractive fiscal benefits. As a highlighted
industry, Malta has undergone some significant changes in
order to encourage the aviation industry:
 Aircraft Registration Act, 2010 - has opened up and
increased flexibility in the registration and use of
financing for aircraft
 Acceding to the Cape Town Convention of International
Interests in Mobile Equipment & Aircraft Protocol - the
international standard - ensures added security to
creditors; allowing ‘self help’ remedies without recourse
to Courts; possibility of ‘Cape Town discounts’ on
interests rates for financiers
 As a member of the EU, Malta issues commercial opera-
tors with EU-OPS 1 certification (aircraft) and JAR-OPS 3
(helicopters); providing 24/7 registration.
Eligibility to Register Aircraft
Persons, trusts or undertakings that may register aircraft:
Commercial Registrations
 Government of Malta,
 Owners operating or owing aircraft, under construction,
or temporarily not in operation or managed,
 Operators of aircraft, under a temporary title (i.e. lessee),
 Buyers under conditional sale or title reservation or simi-
lar agreement, satisfying certain conditions & has opera-
tion authorisation,
 Trustees of qualifying beneficiaries.
Private Registrations
No EU restrictions: individuals, citizens of a recognised
undertaking established in a OECD member country, or
another country approved by the Government of Malta, if
such individual:
(i) can legally own or operate an aircraft;
(ii) appoints a Malta resident agent to represent the owner’s
registration interests in Malta; and
(iii) complies with applicable regulations.
Security Registration - National Aircraft Register
Malta has introduced flexible rules so as to allow as many
owners & operators as possible to register aircraft with the
Malta aircraft registry:
 Citizens of EU member states, EEA or Switzerland having
a place of business or residence therein
 Companies or other undertakings in a form recognised by
Maltese law (comparable to UK Companies Act), having
its registered office, central administration & principal
place of business within EU, EEA or Switzerland.
A non qualifying natural person who is a citizen of, or a
company or undertaking established in an approved
jurisdiction, can register an aircraft under construction, or
not used to provide air service.
Fractional Ownership
An aircraft’s title may be split between co-owners in
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Malta - Promoting & Incentivising the Aircraft Industry
100% EU & OECD Compliant—A Legitimate Low Tax EU Country
Malta’s International Legal & Advisory Firm
Legal | Tax | Accounting

2. Aviation Law
Registration & Services
fractions or percentages; each fraction can be financed and
secured by different creditors.
Each fractional ownership interest may be:
 Noted in the National Aircraft Register - certifications
are issued by the Director General of Civil Aviation,
 Treated as separate international interests via the Cape
Town Convention - each interest capable of being sepa-
rately registered in the International Registry.
Fractional interests are also recognised under the Cape
Town Convention; each fractional interest may be
registered in the International Registry.
Security of Creditors’ Interests
Under Maltese law, mortgages are used as security over
aircraft for creditor’s interests in respect of loans or debts.
Mortgages can be executed in favour of a security trustee
who would be entitled to exercise all rights in relation to
the mortgage. As such a pool of financiers may appoint
one of themselves (or another) to expedite or oversee
matters relating to the mortgage.
Owners’ Priority. In bankruptcy or insolvency matters, all
owner claims have security preference over all other
creditors. Security over an aircraft and the engine
(whether attached or not) is separated in so far as the
assets are the property of different owners. Self help is
available in the even of a mortgage default, without
requirement of the Courts. Subject to giving notice to the
debtor, the owner may sell, take possession in full or share
portion, maintain registration, lease, and / or receive
payments and income, of the aircraft.
Taxation - Income
Remittance: As an ex-British colony, Malta retains the prin-
cipal of domicile . A foreign incorporated and therefore
not domiciled SPV, resident in Malta —subject to certain
conditions analogous to ’effective management & control’
& type of income - will not be subject to Malta tax if
foreign sourced income is not remitted to Malta.
(See Remittance System Fact Sheet for further information)
Effective Corporate Tax Rate
Malta is the only EU country with a full imputation tax
system, resulting in a 5% effective corporate tax rate after
the application of tax refunds & credits. The 5% corporate
rate can be further reduced by claiming:
 Accelerated tax depreciation,
 ‘Step-Up’ of aircraft value from book value to fair
market value upon migration to Malta,
 A foreign tax credit on payments made to Malta.
Finance & Leasing
The finance lessee and not the financing lessor is regarded
as the owner of the aircraft, resulting in the following
benefits:
Operating Leases
 Lessor - tax is only levied on the full amount of lease
income. If responsible for maintenance, tax
depreciation for wear & tear, can also be deducted.
 Lessee - can deduct full amount of lease payments &, if
responsible, for maintenance, can claim the tax
depreciation for wear & tear, can also be deducted.
Finance Leases
 Lessor - is taxed only on the interest portion of the
finance charge which is income. If lessor exercises an
option to purchase an aircraft at the end of the lease
period, the purchase price is considered to be of a
capital nature & no Maltese tax is due from lessor.
 Lessee - is regarded as owner and can deduct finance
charges & costs for repairs, maintenance & insurance &
claim tax depreciation.
(Continued on page 3)
Malta’s International Legal & Advisory Firm
Legal | Tax | Accounting
Acumum Legal & Advisory - Maltese, UK & International Lawyers Knowledgeable | Superb Client Service |Cost Efficient
info@acumum.com | www.acumum.com | Skype ID: acumum
Malta Office: +356 2778 1700
260 St Albert’s Street, Gzira, GZR 1150
Information for guidance purposes only © Acumum 2012. All Rights Reserved

3. Depreciation - Short Wear & Tear Periods
Depreciation can be accelerated
Minimum years over which items can be deducted:
Per Annum
6 16.7
6 16.7
6 16.7
4 25%
Aviation Law
Registration & Services
VAT - New Reductions—Mitigation
The lease of an aircraft is considered a ‘service’, subject
to EU VAT, which is levied on the amount of time the air-
craft supplies services within EU airspace. The leas-
ing service being deemed to be supplied in Malta, the
VAT due on the lease is at the standard VAT rate in Malta
of 18%.
However, new rules issued by the Maltese Government
dictates that VAT is due only on the period that the
aircraft is used within EU airspace.
Malta utilises a technical test to determine the exact
amount of time an aircraft has spent within EU airspace
and consequently the VAT due.
The test takes into consideration: the features of the
aircraft - including aircraft type, MTOM, maximum fuel
capacity, fuel burn, optimum altitude and optimum
cruising speed. As mentioned above, VAT is then due
solely on the period of use of the aircraft in the EU as per
the calculations.
To access the Government of Malta’s Aviation VAT
calculator, please go to:
http://vat.gov.mt/AircraftLeasing.aspx
Importation of Aircraft - Malta (EU) - 0% VAT
Depending on the structure employed, importation of an
aircraft into Malta (and therefore the EU), can be or-
ganised so that no VAT is levied. For aircraft operating
under a Maltese AOC, there is an automatic exemption
and as such no VAT is levied.
Investment Tax Credits
Any person that carries on a trade or business consisting
of the repair, overhaul or maintenance of aircraft, engines
or equipment incorporated or used in such aircraft may
benefit from investment tax credits against the tax due on
its chargeable income to Malta. Unutilised investment tax
credits may be carried forward against tax due in
subsequent years at a multiplied amount.
Other Aviation Fiscal Benefits
 No import duties for civil aircraft,
 No Stamp Duty on any aircraft, as aircraft are not
deemed chargeable assets under Maltese tax law.
Fringe Benefits - No Tax
No tax is due on the private use of aircraft by non-
residents & to certain entities engaged in the ownership,
leasing, or operation of aircraft / engines used in the inter-
national transportation of passengers or goods. This is
particularly useful for owners of private aircraft, wishing
to benefit from Malta’s low tax system in the operation of
their aircraft.
Reduced Employment Income Tax Rates
For expats working in Malta:
 with a minimum annual income of €78, 207 (RPI
adjusted),
 employed under an applicable employment con-
tract,
 holding senior level titles,
only 15% tax on income is levied (See High Earner Tax
Scheme) for four or five years.
Conclusion. Malta offers the aviation industry a legitimate,
onshore, low tax jurisdiction within and through which to
operate aircraft and structure ancillary assets. Please con-
tact us for more information in respect of the registration of
aircraft, securitisation and / or structuring of aviation SPVs
Acumum Legal & Advisory: Maltese, UK & International Lawyers Knowledgeable | Superb Client Service | Cost Efficient
info@acumum.com | www.acumum.com | Skype ID: acumum
Malta Office: +356 2778 1700
260 St Albert’s Street, Gzira, GZR 1150
Malta’s International Legal & Advisory Firm
Legal | Tax | Accounting

4. Malta - An Aviation Jurisdiction
Benefits At A Glance
No withholding taxes on lease payments made by Maltese lessees to
non-residents in respect of aircraft operated in the international
transport of passengers or goods
No withholding taxes on interest payments made by the
Maltese lessees to non-resident financial lessors
Competitive depreciation allowances for aircraft and engines Tax credits for companies engaged in the repair, over-
haul or maintenance of aircraft, engines or equipment
incorporated therein
Tax refunds to shareholders on distribution of profits No taxable fringe benefits arising from the private use of
aircraft by non-resident individuals who are sharehold-
ers, employees or officers of companies involved in the
international transport of goods or passengers.
Extensive double tax treaty network - 64 and counting
Acumum’s Aviation department can provide you with a variety of services
International tax efficient structuring & optimisation of aircraft purchases,
financing, leasing, corporate & of operator’s business
Registration, amendment,
transfer &deletion of aircraft
Registration, amendment, transfer and discharge of national
and/or international security rights
of Malta-registered aircraft
Chartering & leasing agreements Purchase & sale transactions
Servicing, maintenance & repair agreements. Searches of the Malta national aviation register - aviation &
Maltese aircraft – owning entities
Structuring & implementation of aircraft financing
&
re-financing transactions
Preparation & review of
- loan agreements, security agreements,
- statutory mortgages over aircraft body and engines,
- collateral deeds of covenants, issuing of legal opinions
Enforcement of claims against Malta-registered aircraft
& their engines, and aircraft situated in Malta
Co-ordination of all technical requirements for the operation
of commercial aircraft with industry experts
Malta’s International Legal & Advisory Firm
Legal | Tax | Accounting
Acumum Legal & Advisory— Maltese, UK & International Lawyers Knowledgeable | Superb Client Service | Cost Efficient
info@acumum.com | www.acumum.com | Skype ID: acumum
Malta Office: +356 2778 1700
260 St Albert’s Street, Gzira, GZR 1150
Information for guidance purposes only © Acumum 2012. All Rights Reserved