OSR is an exemption from VAT on the importation of goods, made into Malta from a country outside the European Union (EU) by a taxable person registered for VAT in Malta, which are released into free circulation in Malta, and subsequently dispatched or transported within 30 days to a taxable person into another EU member state as an intra-community supply.From the Maltese tax payer’s perspective this will be seen as an exempt intra-community supply (requiring such a transaction to be included into the recapitulative statement). Ultimately, VAT will be accounted for in the other member state where the taxable purchaser is registered, usually under the reverse charge mechanism.Application of the OSR Procedure on Yachts and Sea VesselsImportation of a yacht (pleasure or commercial) into Malta which is eventually resold to third parties in another EU member state may also fall within the scope of the OSR Procedures. The main difficulty in practice when the importation of yachts is involved is how to offer evidence of transport for the reason that yachts and sea vessels normally travel through their own means. In this regards, the Maltese importer shall submit to the Customs Authorities documentary evidence that the sea vessel will be sailing to another EU Member State, such as the relevant berthing requests and permits for the next port of call in the member state of destination.The person will also be required to submit a bank guarantee amounting to 10% of the VAT due at the Maltese rate on the value of the sea vessel (capped to a maximum amount to be decided by the Customs Authorities, presently standing at €10,000). The guarantee will be released upon presentation of documentary evidence that VAT had been paid or accounted for in another Member State and that the yacht had proceeded to another Member State, which may or may not be the Member State of final destination.