The European Community has begun to investigate Cyprus, Malta and Gracia (Photo Tourist Guide of Malta and Gozo)

After the leaks of the Paradise Papers. Last year, the European Commission decided on 8 March to send formal notification letters to Cyprus, Greece and Malta for not collecting the correct amount of VAT on the purchase of yachts. This infringement procedure concerns the application of reduced VAT for the rental of yachts in the three Member States and the incorrect application of VAT on the acquisition of yachts through leasing (lease with option to purchase) in Malta and Cyprus. The European Commission is conducting an investigation to all Member States to verify whether the same mechanism is being used in any of them. The Maltese authorities and several yacht associations are preparing their defence against the arguments of the European Commission. EBI is currently in contact with all parties and monitoring any development that may occur.