The Aircraft Registration Act is in the process of being amended with the aim of attracting more aviation business to Malta, according to Tourism Minister Edward Zammit Lewis. The 2010 Act will be updated to make this sector even more attractive than it currently is and help foreign investors to relocate their business to Malta.
Public consultation by Transport Malta is currently underway regarding such proposed amendments. The consultation document may be viewed below:
Consultation Document – TM
The aim of this exercise is to update the Act with cosmetic changes which have been identified in the last few years, but more importantly some substantive changes which can ensure a longer term competitiveness for the Maltese jurisdiction in the aviation industry.
The main substantive changes being proposed are as follows:
a) the Act currently only allows for a whole aircraft to be offered up as security. The amendments to the Act will allow high-value parts such as an aircraft engine to be given as security.
b) establishment of a separate regime applicable for aircraft leases which would give similar rights to those currently found in the First Schedule to the Act. This is proposed to avoid doubts as to whether the Courts should refer to the general Maltese law on lease in such cases, thereby ignoring the remedies granted by the said Schedule.
c) While helicopters may be registered by in the National Aircraft Register, no specific provisions exist in the Act that cater for helicopters. Transport Malta is therefore making an assessment of the legislative provisions of competing jurisdictions in order to identify whether certain amendments are required in order to distinguish helicopters from other aircraft.a) the Act currently only allows for a whole aircraft to be offered up as security. The amendments to the Act will allow high-value parts such as an aircraft engine to be given as security.
d) The VAT department has in the past few years issued guidelines applicable to aircraft leasing. The scope of the current exercise is to identify any potential pitfalls in the guidelines and how these can be made more attractive when compared to other jurisdictions such as the Isle of Man.
e) Depreciation of helicopters and aircraft – currently, the Income Tax Act allows depreciation of aircraft over a minimum 6 year period, whilst aircraft engines may be depreciated over a 4 year period. Although the established useful life seems to be favourable from a tax perspective, it seems to be inappropriate when applied to helicopters, since these are generally depreciated according to the use made of the said helicopters (i.e. depending on flight-time). Amendments are being proposed in this area.
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