In a VAT Seminar held at the Antibes Yacht Show, Janet Xanthopoulos, head of the yacht department at Monoeci Management SAM, discussed recent VAT changes affecting the operation of commercial yachts within the EU. With the charter season in Europe just around the corner, The Crew Report brings you a summary of the most relevant changes that were addressed during the meeting.



Balearic Islands

•    Before October 2013, the Spanish Matriculation tax applied to all pleasure yachts over 8m registered under Spanish flag and all yachts over 15m chartering in Spanish waters.

•    No charter could start or end in Spain unless the yacht was under Spanish flag or the foreign flagged yacht was covered by a charter licence and the 12 per cent matriculation tax paid.

•    After many years of lobbying, on 17 October 2013, a tax bill approved the removal of the 15m limit, which now allows EU commercial yachts operating in Spanish waters to apply for the Matriculation Tax exemption.

•    Matriculation Tax is over but VAT at 21 per cent will still be charged on all charters starting in Spanish waters.

•    To be able to start and/or terminate a charter in the Balearic Islands, it is required to appoint a fiscal representative, register for Spanish VAT, apply for the Matriculation Tax exemption and apply for a charter licence.

•    Charter licences are only granted to EU entities for the time being (Isle of Man accepted).

Croatia

Croatia joined the EU on 1 July 2013, and have therefore implemented a VAT system, which was announced in Zagreb at the end of January 2014.

•    Standard VAT rate is set at 25 per cent, however 13 per cent VAT will be applied to charters starting in Croatia.

•    Charter in Croatia can be performed by EU and Croatian flagged commercial yachts regardless of size.

•    Non-EU flagged yachts of over 40m in length could perform charter if they obtain a charter licence. There are a limited number of licences available and these are delivered on a first come, first serve basis. The charter licence will be valid for one year and could take up to three months to be issued.

•    Such commercial yachts allowed to charter in Croatia would need to appoint a fiscal representative and obtain a Croatian VAT number. They also need to have on board a technical inspection report issued in the last 12 months, otherwise a Croatian inspection might be required.

•    Non-EU commercial flagged yachts under 40m cannot embark in Croatia, however, they can embark in Montenegro or Slovenia without paying VAT and disembark their guests in Croatia. Questions still remain over whether VAT will be applied for the time spent in Croatia.

France

•    The ‘Bulletin Officiel des Finances Publiques’, published 25 June 2013, announced the end to the so-called ‘French Commercial Exemption’. Since 15 July 2013, all charters starting in French and Monaco waters are subject to French VAT at the full rate of 20 per cent.

•    It is necessary to appoint a fiscal representative in France and/or Monaco depending upon where the charter starts and obtain a French VAT number.

•    It is possible to apply the VAT rate on only 50 per cent of the charter consideration if the charter includes voyages outside of the EU.

Greece

Newly announced rules under ‘Touristic yachts and other provision’ as of 14 April 2014.

•    End of necessity to obtain a Greek charter licence to be able to embark and disembark passengers in Greek waters and abolition of the 10 per cent Luxury Tax imposed on pleasure yachts.

•    EU commercial flagged yachts and non-EU commercial flagged yachts of over 35m (providing they are larger than 35m, built of metal or GRP and can carry over 12 passengers) can now charter from Greece (embark and disembark passengers) by opening a Branch Office or by appointing fiscal representative (TBC) and registering online with the 'Registry of Touristic Yachts and Small Vessels' and submitting an application to the Ministry of Mercantile Marine and Aegean

•    There is a minimum number of days of charter needed over a three year period. This is 105 days if chartered without crew or 75 days with crew and 25 days for classic yachts (with 5-20 per cent reductions depending upon the age of the yacht.) No minimum days are required for VAT-paid yachts.

•    EU yachts still need to obtain a DEPKA and non-EU yachts a Transit Log which are delivered for one year.

•    For commercial yachts a declaration shall be made to the port of embarkation 48 hours prior to departure and charter agreement submitted.

Italy

•    Since 2012, all charters starting in Italian waters are subject to Italian VAT.

•    It is necessary to appoint a fiscal representative in Italy and obtain an Italian VAT number.

•    The standard VAT rate in Italy is now 22 per cent. According to circulars and related rulings this VAT rate is reduced depending on the size of the vessel (based on a deemed use outside of EU waters).

•    The VAT rate applicable to charter yachts over 24m starting their charter in Italy and cruising in and outside of Italian waters has been reduced to 6.6 per cent.

•    If the charter starts outside the EU and then enters Italian waters, then VAT at the reduced rate of 6.6 per cent (or higher for yachts below 24m) will apply only to the portion of the charter taking place in Italy, providing it is demonstrable.

•    If a charter starts in Italy but leaves Italian waters within 6 hours, no VAT is due.