If you thought VAT on chartering was a subject done to death then maybe it is time to think again!
The MYBA charter yacht show hosted a seminar on the subject open to all registered delegates to a packed audience that offered standing room only in auditorium equipped with 104 seats.
Alex Mazzoni of SOS Yachting in Milan was one of a panel of experts who spoke on the subject from an Italian viewpoint. He stated quite categorically that there was no VAT problem with regard to chartering in Italian waters. Charters are taxable because governments need the money he said. You cannot avoid the tax and there is only then a question of what tax is due.
The amount is 21% on charters where the yacht remains in Italian waters and 6.3% where yachts are known to have travelled at sea out side the international limits. The only document that can prove thesis the yachts log book kept by the Captain. It is best that you ensure documents are in order and do not try to be silly saying that the yacht has been whale watching outside the 12 mile limit when she did do so only for an hour or so.
Toby Maclaurin the current chairman of MYBA told delegates that as an industry brokers had a duty to advise clients to pay VAT. He advised that APA should be treated and referred to as a deposit where as a result it would remain free of VAT. Tell the Captain to keep scrupulous records and buy supplies specifically for a charter in the name of the charter party to avoid confusion he suggested.
Talking about the situation in France was lawyer Freddy Desplanques of Ince and Co who now have an office in Le Havre. His advice was refreshingly simple. Do nothing! He said, “VAT on charters that begin in France simply does not exist until such time as the French government change the law and that is unlikely now until next year.”
It his contention that it is not France that is in breach of E U regulation but in truth is more the fault of those in Brussels who are the rules. Until they clarify what is meant by commercial vessels navigating the high seas the super yacht industry need not worry