Aviation

Boasting a sound set of aviation laws, its membership with EASA and the corresponding high safety standards, the vast regime of unilateral and double taxation treaties and seemingly endless fiscal benefits, Malta's reputation in the aviation industry is of no surprise. Whether owner or operator, we can can assist with all legal and fiscal aspects relevant to your craft and activity.

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The aviation industry in Malta enjoys stable growth, having a solid legal backbone to sustain it. Malta was the first EU country to implement the Cape Town Convention and has succeeded in introducing this in a straight forward, easily accessible manner. The increase in aircraft and mortgage registrations as a result of the growth has also served to ameliorate other facets of the aviation service offerings in Malta.

Stakeholders are guaranteed an efficient and high quality 24/7 service in a jurisdiction with English as its business and legal language, low authority fees, high standards of safety and security in full compliance with EASA and the local availability of a wide range of airline services including aircraft and engine maintenance, repair and overhaul, aircraft management, aircraft maintenance training and other ancillary support services.

A sound set of aviation laws feature the implementation of the Aircraft Registration Act of 2010 which transposed the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol collectively serve to provide for special privileges on aircraft and the ranking of secured creditors, to grant secured lenders a higher degree of protection and more effective remedies, to recognise fractional ownership of aircraft and to provide for registrations of aircraft that are not used for commercial air service.

Further welcome factors of Malta within the industry include the participation in numerous international aviation agreements and conventions including the Chicago Convention, the mutual recognition of AOCs, flight crew licences and engineer’s licences, its membership with EASA and the corresponding high safety standards, and not least that it is an EU Member State and consequently a Malta registered aircraft can operate freely within the EU. 

An array of fiscal benefits have also contributed to Malta’s reputation in the aviation industry. Noteworthy are the absence of withholding tax on outbound payments of dividend and interest, the accelerated depreciation rates for aircraft, a vast regime of unilateral and double taxation treaties and the assumption that income derived from the ownership, lease and operation of an aircraft engine used of the international transport of goods or passengers arises outside of Malta.

With the introduction of private aircraft leasing, availing of a VAT leasing structure reduces the percentage of VAT charged on the value of the aircraft to as low as 5.4%, which rate is calculated on the aircraft range in kilometres and the percentage of community use.


How can novolegal assist?

Our team is able to assist owners and operators alike with various legal aspects related to aircraft registration including assistance with applications for Air Operator Certificates and Operating Licences from the Civil Aviation Directorate in Malta, aircraft registration and the registration of security interests over aircraft, importation of aircraft, advice relating to lease structures, and general legal support and advice from both a regulatory and a practical perspective. Together with advocates from complementary practice areas, specialising in the use of Malta companies in local and international aircraft ownership and management structures for the purpose of VAT and tax planning maximization, novolegal is excellently placed to offer its aviation clients a consolidated legal and advisory service

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