Malta has reinforced its principal position as a dependable jurisdiction for international groups and carries on growing as a centre for aircraft leasing business. The Maltese regulatory and fiscal system has seen a sharp upsurge in popularity as a jurisdiction for international business, predominantly in the creation and establishment of aircraft leasing engagements.
Over the years, Malta turned out to be a jurisdiction of choice in the area of aircraft leasing arrangements, aircraft registration and aircraft maintenance. The Maltese tax refund system may be used as an advantage to various establishments involved in the aircraft leasing transactions. Yet, the tax treatment can be altered depending on whether the lease is a finance lease or an operating lease.
In the case of a finance lease, the lessor would be taxable in Malta on the finance charge, with deductions permissible for any finance cost. On the other hand, in the case of an operating lease the lessor will be subject to taxation at 35% on its lease income while also being eligible to the tax refund system which will lessen the effective Malta tax charge to a maximum of 6.25%.
Malta’s regulatory and fiscal system has definitely led to improve the significance of the aviation jurisdiction.