States operating Flags of Convenience continue to find innovative ways around regulations that give them the edge on the more traditional flags.
One such regulation involves the need for a yacht to be classified as being either private or commercial and for owners to overcome their concerns about full commercial yacht registration for yachts with mainly private use.
The problem in the past has been the need for schemes to become validated by French Customs and PSC Authorities who have in the past been reluctant to recongnise so called dual use.
Now after nearly two years working along with the Republic of the Marshall Islands (RMI) Registry, WES, the French Customs and the Port State Control Authorities, Rosemont Yacht Services has announced a new dual use innovative solution.
By designating the yacht as a Yacht Engaged in Trade (YET), the initiative combines private and commercial use without falling foul of existing Flag, Customs and Port State regulations.
Under the scheme, owners no longer willing to operate their yacht on a fully commercial basis can use a solution which permits them to use the yacht on a private basis, whilst offering the possibility to charter the yacht out to third parties for nearly three months a year to minimise annual running costs.
The tax saving scheme allows flexibility of use and offers:
- Private use without losing the option to charter the yacht on an occasional basis (up to 84 days/year)
- No need to sign a charter agreement paid at commercial market rates each time owners want to charter their yacht
- No need to pay VAT on owners use
- No need to leave EU waters and touch a third country port to allow change of use of the yacht Exemption of VAT available on works for non VAT paid yachts
- No risk of requalification in case of extensive private use
So far the Marshall Islands is the only flag promoting a dual use that has been validated by Port State Control Authorities (Paris MOU) for temporary commercial operation