Flying the Dutch flag
Can the Dutch Flag provide superyacht owners with a legitimate alternative to the tried and tested flag states?
At the HISWA press tour 2017, Michael Steenhof, section manager at HISWA, made a case for the Dutch Flag as an alternative to the more traditional yachting flags in an exclusive interview with SuperyachtNews. The Dutch Flag has been presented as a one-stop shop solution for superyachts, covering construction, safety standards, commercial exploitation, manning and advantageous registration, to be supported by management companies in The Netherlands.
“We started the Flying the Dutch Flag project around five years ago,” starts Steenhof. “The first challenge was to get the Dutch government to accept the MCA rules, because this is the standard used in superyacht business. This was quite a challenge because The Netherlands was not familiar with this set of rules. After a long process of deliberation and research the Dutch government accepted the MCA rules.”
Flying the Dutch Flag will allow owners to benefit from a VAT-exempt status, provided the vessel is commercially operated. This system includes exemption of VAT on the purchase of the vessel, as well as services provided by the shipping company to charter guests. Owners will be able to use their vessels for 50 per cent of the time they have chartered them. In other words, if the vessel is chartered for six weeks, the owner can use his own vessel for three weeks.
“We didn’t want to create a fiscal construction,” says Steenhof. “We just wanted a clear fiscal system in place that mirrored that of the commercial shipping world and the Dutch ethos.”
Steenhof explains that the hope of this enterprise is to bolster The Netherlands’ yachting economic activity by encouraging yacht management companies to base themselves in Holland. In so doing, the Dutch will not only build the yachts, but manage the vessels and build a greater connection to the vessels and their owners.
Flying the Dutch Flag was officially launched in Novemeber 2016, and HISWA believes that it is now time to roll out the offering to the industry and convince the market and owners of its validity and benefit. “The market needs to pick up the project and take it to the next level with business cases and so forth,” says Steenhoff.
The major benefit, according to Steenhof, is that the system is fiscally clear and will provide owners a degree of peace of mind that may be lacking as a result of other fiscally complex systems. The Dutch Flag is a white listed flag of convenience with no stigma attached, less it be its immaturity in the yachting industry.
“We see all around the Mediterranean that there are lots of checks on the VAT status of yachts because the magnifying glass is on the superyacht industry and because there is a degree of fiddling elsewhere,” Steenhof says. “We want to transplant the best of the commercial shipping industry into the yachting sector. There is a lot of knowledge that needs to be reshaped and utilised.”
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