Guide to VAT and Taxes on Yacht Charters : What you need to know
When planning your dream yacht charter, it’s important to understand the taxes, especially VAT (Value Added Tax), that may apply to your booking. VAT is a consumption tax that is added to the charter fee and varies by country. This guide will explain how VAT works, what you need to know for a smooth experience, and the VAT rates in different countries.
What Is VAT on Yacht Charters?
VAT, or Value Added Tax, is a tax applied to the price of goods or services in many countries. When it comes to yacht charters, VAT is usually added on top of the charter rate. It’s important to know that VAT is calculated based on the charter fee, excluding the Advance Provisioning Allowance (APA) or any extra costs, like fuel or port fees.
How Does VAT Work on Yacht Charters?
Here are a few things you should know about how VAT works for yacht charters:
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Added to the Charter Rate: VAT is calculated on the charter rate and added to the total cost.
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When Is VAT Due?: According to contracts like MYBA and CYBA, VAT is typically due 30 days before your departure date, along with the balance of the charter fee and any APA.
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Jurisdiction-Specific: The VAT rate depends on where the yacht is operating. Even if the yacht is in international waters, the VAT rate of the country where the charter begins or ends will apply.
VAT Rates on Yacht Charters in EU Countries
Here are the VAT rates for yacht charters in several popular European destinations:
| Country | VAT Rate | Details |
|---|---|---|
| France | 20% | Full VAT applies for charters starting in French waters. |
| Italy | 22% | Full VAT applies for charters starting in Italian waters. |
| Greece | 13% | VAT varies, with reductions for longer charters and certain yachts. |
| Spain | 21% | Full VAT applies for charters starting in Spanish waters. |
| Croatia | 13% | VAT is mandatory for charters starting in Croatian waters. |
| Turkey | 20% | Full VAT applies for charters starting in Turkish waters. |
| Slovenia | 22% | VAT applies to the full charter fee for yachts in Slovenian waters. |
| Cyprus | 19% | Reduced rates may apply for charters, including non-EU waters. |
| Malta | 18% | Rates can be reduced for charters in international waters. |
| Sweden (Stockholm Archipelago) | 6% | VAT applies for charters starting in the Stockholm Archipelago. |
Key Details on VAT in Popular Yachting Destinations
- France and Monaco
In France and Monaco, if your charter begins here, VAT is charged at 20%. This applies to the charter fee and any delivery or redelivery fees. If your yacht spends time outside of EU waters, you may be able to get a VAT refund after the charter is completed. - Italy
Italy has a 22% VAT rate for charters starting in Italian waters. Previously, lower rates were available for charters traveling outside EU waters, but this is no longer the case. Like France, you can get a VAT refund if your yacht spends time in international waters. - Greece
In Greece, VAT can be as low as 13% for yachts with a Greek charter license. For longer charters (over 48 hours), or for certain types of vessels, discounts are available, making Greece an attractive destination for yacht charters. - Spain
Spain applies a 21% VAT on all charters starting in Spanish waters. There are no reductions, even for international waters. However, if your charter starts outside the EU and enters Spanish waters later, VAT is only charged for the days spent in Spanish waters. - Croatia
Croatia charges a 13% VAT on charter fees for yachts starting in Croatian waters. However, delivery and redelivery fees are not subject to VAT. If your charter starts outside the EU and enters Croatia, VAT is calculated only for the time spent in Croatian waters. - Türkiye
Türkiye applies a 20% VAT on all charters starting in Turkish waters. However, foreign-flagged yachts may benefit from a 0% VAT rate. Türkiye also requires a cruising permit for yachts under 39 meters and a special charter license for yachts over 39 meters.
VAT and Other Taxes in Non-EU Countries
Some non-EU countries also charge taxes on yacht charters. Here’s a quick look at the VAT rates in popular destinations:
| Country | Tax Rate | Details |
|---|---|---|
| Bahamas | 4% Sales Tax + 10% VAT | Both taxes apply to the entire charter fee. |
| Maldives | 12% GST | Applies to charters within Maldivian waters. |
| New Zealand | 15% VAT | Applies to charters within New Zealand’s territorial waters. |
| French Polynesia | 5% VAT | Applies to charters starting in French Polynesian waters. |
How VAT Is Applied Based on Location
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Charters Starting in VAT Countries: If your yacht charter begins in a country that applies VAT, you will pay VAT based on that country’s rate.
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International Waters: Some countries have rules that allow for a reduced VAT rate if the yacht spends time in international waters. For example, in France and Italy, if your yacht travels outside of the EU, you might be eligible for a partial VAT refund.
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Split Itineraries: If your charter crosses multiple countries, VAT may be applied based on the time spent in each country's waters. The tax will be prorated according to how long the yacht stays in each jurisdiction.
Ready to Set Sail with Confidence?
Understanding VAT and taxes on yacht charters can be complex, but with the right guidance, you can navigate these waters without any issues. If you’re looking for expert advice on managing VAT and other taxes for your yacht charter, Breaking the Mould Accounting Limited is here to help. Our team of professionals specializes in ensuring your charter experience is smooth and tax-compliant, allowing you to focus on enjoying your time on the water.
Contact Breaking the Mould Accounting Limited today for personalized support and expert advice tailored to your specific needs. Let us help you break the mould and get the most out of your yacht charter hassle-free!
