A variety of VAT charges are currently being applied on luxury yacht charters in the European Union with countries such as Italy, Malta, France and even Greece and Croatia all having different rules and different rates of VAT. EU Commission is now moving towards a flat rate it seems and a decision on this is imminent ...
Changes on application on VAT may occur very soon in Europe. This in particular in relation to the current reduced VAT lump sum taxable base on charter contracts. The EU Commission’s goal is apparently to harmonise rules abolishing the laws currently in place in Italy, France, Malta and Cyprus for the reduction of VAT on the taxable base for charter contracts and apply the general criteria contained in articles 56 and 59a of the EU VAT Directive 2006/112/CE.
Experts in the industry point out to the intention of the EU Commission, which is to allow for the future, a reduction of VAT on charters only on an actual calculation method in accordance with the provisions of article 59a:
“In order to prevent double taxation, non-taxation or distortion of competition, Member States may, with regard to services the place of supply of which is governed by Articles 44, 45, 56 and 59:
(a) Consider the place of supply of any or all of those services, if situated within their territory, as being situated outside the Community if the effective use and enjoyment of the services takes place outside the Community;
(b) Consider the place of supply of any or all of those services, if situated outside the Community, as being situated within their territory if the effective use and enjoyment of the services takes place within their territory.
However, this provision shall not apply to the electronically supplied services where those services are rendered to non-taxable persons not established within the Community”.
The Italian Ministry of Economics and Finance (MEF) and the French Authorities are working with the EU Commission in order to outline new guidelines to be put in place before the start of the yacht charter season 2020.
Each EU country has VAT Experts who are involved with the Authorities in the discussion to get information and instructions before the end of 2019 and we hope to be able to follow such updates that are expected in the next couple of weeks.
It seems that the direction of the discussion goes to the application of a possible pro rata reduction for cruising outside of European waters according to the time or to the cruising miles spent in International waters as per above mentioned article 59a.
We are not quite certain what rules are applicable now, but are increasingly aware of the charter market’s need of receiving responses and guidance in order to plan the next charter season in the Med putting owners and charterers in a legal position. We will therefore recommend to each client to put in place a Security Deposit and request a clarification in writing or directly on the contract that VAT regulation may change and a difference of VAT should be due by the charterer on the contract in 2020.
In case you are interested in chartering a luxury yacht or buying one of the PUCCINI YACHTS through us as UK Exclusive Dealers, do let us know by filling out the CHARTER REQUEST FORM or send us an email to
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MY CICO is one of the latest Sunseeker motor yachts availble for private yacht charters in Croatia. Launched in 2018, CICO remains in pristine condition which makes her ideal for luxury yachting getaways from Split and all night partying and all day snorkelling, swimming or sunbathing on Zrce beach or in Port of Hvar...
A 40m luxury motor yacht MY LADY LEILA will be cruising the area once again during Summer 2020. There is no other private charter yacht in this range with such a great experience within the ABC islands. Sail from Bonaire to Klein and onwards to Spanish Bay and Willemstad to fullfil your wildest dreams ...
SY VULPINO is the latest 60ft sailing catamaran available for yachting getaways to the Dalmatian islands. With a volume compared to bigger 70ft multihulls, latest designs in the interior as well as exterior and very friendly pricing from as low as 16,500 Eur/week, she is now the most recommendable charter yacht in Croatia.
Keen on partying in the Caribbean?
How about an exclusive yacht charter getaway on board of an 80ft luxury catamaran with an itinerary covering shopping splendours of St Barths & French restaurants Mecca in St Martin ? You can also sail around Antigua, St Kitts & Nevis or island of Anguilla at the same time ...
Looking for a luxury gulet charter in Sicily!? Keen to visit both Egadi and Aeolian islands at the same time!? How about a 2-week charter from Capo d’Orlando to Palermo as that would allow you to visit the two most spectacular of Mediterranean archipelagos. With MV BUBU, 16 guests can enjoy a lovely Italian themed cruise ...
Sandy and Doug chartered a luxury ASTONDOA 105, a 31.5m super yacht in South of France. A meticulously planned charter went exceptionaly well and we even arranged for a JET SKI instructor to come on board so the clients could get their Jet Ski licences.
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