EU Yacht chartering VAT

When chartering yachts for use in EU waters, it is important to be fully aware of the tax implications and rights in place. The procedure regarding maritime and tax obligations for yacht owners can be a relatively complex one, therefore it is recommended that you seek the advice and assistance of a professional consultancy firm before proceeding.

For more information on the VAT imposed on yacht chartering on EU waters, please click on the following link to view our Marine Services section.

VAT on yacht chartering explained

Chartering is an activity that takes place within the shipping industry and involves hiring a vessel, and in some instances a crew, for a certain period of time. When chartering a yacht in EU waters, it will be taxable for VAT purposes, due to the fact that chartering a yacht in this region is treated as a supplier’s services. Where the yacht owner is registered with an EU member state and performs yacht chartering services within or out of EU waters, the yacht owner is liable to register for VAT, and must apply to the relevant VAT authority.

Where a yacht owner is not established in an EU member state, they will not be required to pay any VAT charges for chartering. However if a vessel owner is domiciled in an EU member state, they will be required to pay VAT of yacht chartering.

Different tax implications and exemptions will apply to different vessels, depending on the individual conditions of the vessel as well as the jurisdiction that it is registered in. Although yacht chartering VAT is a necessary prerequisite before sailing on European waters, there are a number of schemes in place that allow yacht owners to claim back their VAT under certain circumstances.