LAST UPDATE AND ADVICES: Charter taxes & VAT in the Mediterranean
As summer season is approaching quickly it’s time to plan your escape to the sun !
Yachtside keeps you advised of the latest news and updates regarding the VAT on charter contracts. We remain constantly informed in order to communicate the correct information and to advise our clients expeditiously.
Thus, while most of the VAT procedures are unchanged, there have been some new updates regarding reduced VAT in France and Italy.
In most countries, a VAT rate will be added on top of the charter fee. An overview of VAT rates and taxes is provided below, however please make sure to discuss with your Charter Consultant as exceptions may apply and rates are subject to change.
For EU member states, the VAT is due in the country where the charter begins, although there are exceptions to the rule. For charters commencing in a non-EU country but passing-by or ending in an EU country, VAT will be applicable for the number of days spent in the EU country’s territorial waters.
Please keep in mind that the owning company must be VAT registered in each EU country where the yacht intends to start chartering. In most cases, the yacht must be imported under commercial registration into the EU.
FRANCE AND MONACO
The VAT rate is 20%. A reduced rate of 10% is applicable for itineraries including navigation in international waters. VAT is also applicable for delivery and redelivery fees. The 50% VAT reduction will no longer apply for yachts cruising into international waters. Any reduction in VAT will be applied for actual time spent in EU waters.
The VAT rate is 21% for yachts with a Spanish charter license starting charters in Spain. VAT is charged on delivery/redelivery fees. EU flagged yachts can charter anywhere in Spain. Non-EU flagged yachts can only charter in the Balearic Islands and Barcelona. If the owning company has fiscal residency in a country that has no dual taxation treaty signed with Spain then it is subject to a 24% Non- Resident Income Tax.
The VAT rate is 0% while cruising in Turkey, however local cruising taxes apply. Yachts with a Turkish flag are taxed at 18%. Non-EU flagged yachts may start and end charters in Turkey as long as they cruise outside of Turkish waters throughout the itinerary.