The Malta flag comes with a set of highly attractive fiscal incentives applicable to operators of aircraft and aircraft engines as well as foreign investors. One of the most fundamental provisions in relation to such is that income derived from the ownership, leasing or operation of aircraft or aircraft engines shall be deemed to arise outside Malta for Maltese income tax purposes, irrespective of:
- the country of registration of the aircraft/engines;
- whether the aircraft calls at or operates from Malta.
Under Malta’s remittance basis of taxation, income deemed to arise outside Malta is exempt from Maltese tax. Furthermore, Malta’s fiscal legislation provides for beneficial depreciation periods for wear and tear of aircraft and aircraft equipment. It is also significant to note that Maltese law provides for an exemption from fringe benefits applying to non-residents and to certain entities whose business activities include ownership, leasing or operation of aircraft or aircraft engines used for or employed in the international transport of passengers or goods.