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How To Cut Yacht Charter Taxes In Half

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Blue box with text inside of it. The text reads VAT on top in bold white letters. It reads ALERT below the word, vat, but the word, alert, is in normal font, not bolded.

VAT taxes on yacht charters

THE CHALLENGE

Every summer, hundreds of well-heeled travelers migrate to the Western Mediterranean.  They travel there to enjoy a private yacht luxury charter vacation.  Coastal towns like Nice and St Tropez in France participate.  San Remo and Portofino in Italy also host dozens of superyachts. The boats are packed with charterers from around the world.  It’s an affluent vacation.  Even the wealthy cringe when their exclusive yacht rental holiday is socked with VAT charges often in excess of 12%.  They know the value of their hard-earned dollars.  We make sure that their memorable and valuable vacation funds are spent wisely.

 

HIGH TAXES

Imagine spending €725,000/wk to rent a yacht. For example, Admiral superyacht PLANET NINE as your holiday hire.  Just envision incurring an additional €87,000 in VAT?  Ouch!!!

 

THE SOLUTION TO LOWERING TAXES

Over the years, we composed many blogs about the challenges of VAT taxes.  Yacht rental guests need to stay aware of the laws.  In some years, yacht charters were VAT exempt. In others, the exemption was rescinded.  The rates go up, down, and often vary among various European Union countries, like France, Spain, and Italy.

 

COMPANY PRESIDENT COMMENTS

Fortunately, with a little advance planning, it might be possible to reduce your charter’s VAT liability by up to 50%.  Jana Sheeder, our company’s President explains:

 

“If you rent a luxury yacht for a vacation in the South of France, say, Nice, Antibes, Cannes, and neighboring Monte Carlo (in the principality of Monaco), you will incur a VAT charge of 12%. However, if leave European Union waters during your charter, the VAT is reduced by 50%.  The easiest way to accomplish this is to schedule an overnight run to the island of Sardinia, off the French coast. Spend a day of so in the area, then cruise back to the South of France.  Not only is this a worthwhile itinerary, you’ll also enjoy a tremendous discount in your VAT expenses.”

 

MAKING IT LEGAL

To accomplish this, and to be in full, legal compliance with the European Union statutes, Jana adds a clause to the client’s yacht charter agreement that reads, in part

 

“It is agreed between the parties that the yacht will cruise in international waters for part of the itinerary, which has not been determined, so VAT will only be charged on the 50% of the charter fee. In the event the yacht does not cruise in international waters and VAT becomes due on the total amount of the charter fee, the charterer hereby agrees to pay the outstanding VAT on the total amount of the charter fee in cleared funds and without delay to the stakeholder. VAT is calculated with a lump sum reduction of the time spent in EU waters in application of BOI-TVA-CHAMP-20-50-20-20120912 Article 90.”

 

SAVE MONEY ON FRANCE AND ITALY CHARTERS

In addition to reducing VAT expenses in France, it’s also possible to find similar savings in other Western Mediterranean destinations.   Similar money-saving strategies apply for charter yacht luxury vacations in Italy as well.

 

1-800 YACHT CHARTER STRATEGY

For example, if a charterer wants to start and end a 10 night trip in Naples, Jana will encourage the client to end the charter in Sardinia, to the west, or Sicily to the south, in order to cruise through international waters, and qualify for a reduced VAT fee.

 

CONTACT US FOR BEST PRICE GUARANTEE

In conclusion, with just a little advance planning, it’s possible to save thousands of dollars on your next luxury rental yacht vacation!

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St Lucia Works to Bolster Yacht Charter Market

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Aerial photograph of St. Lucia. Pitons mountains appear in the background.

St. Lucia, Caribbean

ST. LUCIA GOVERNMENT POLICIES

St. Lucia makes a move to bolster and support cruising in its waters.  The government announced new, revised policies regarding yachting. 

 

GROWTH AND DEVELOPMENT

Policies are announced by the St Lucia Ministry of Tourism and Civil Aviation.  They create rules to stimulate growth in St. Lucia’s yachting sector.  New rules facilitate clearing in and out of the country. They also ease taxation and include many other benefits.

 

CHANGES

There are five changes.  For instance,

  1. 100% waiver on income tax from operations for the first 5 years for local charter companies with a minimum of 1 captain and 3 crew members and a fleet of 3 or more power or sailing vessels
  2. Approval has been given for the formation of a Yachting Committee, that falls under the purview of the Ministry of Tourism and Civil Aviation and will incorporate all relevant institutions that function to regulate the yachting sector in St. Lucia

Additional Changes

Third,  100% waiver of import duty and consumption tax on boat safety equipment and watercraft activity equipment, which includes sport fishing, SCUBA diving, kite surfing and other water sports, subject to verification of the Bill of Quantities by the Ministry of Tourism and Civil Aviation for 5 years from date of cabinet conclusion
Photograph of a man kitesurfing. He is airborne. His kike is fully-inflated. He is over the water, and his shadow is below him. The sun is shining overhead, and there is a mountain in the distance.

Kitesurfing in St. Lucia on yacht charter

FINAL CHANGES

Fourth,  100% waiver of import duty and consumption tax on all equipment and materials imported or purchased locally for use in the establishment of infrastructure to service yachts over period of 5 years, subject to verification and approval of the Bill of Quantities by the Ministry of Tourism and Civil Aviation

Finally, the Government of Saint Lucia has waived the visa requirements for Russian and Australian nationals so that Russian and Australian nationals no longer require visas to enter Saint Lucia.

 

JANA SHEEDER, COMPANY PRESIDENT, COMMENTS

Jana Sheeder, President of SailAway Yacht Charters and 1-800 Yacht Charters applauds the new regulations.  Says Sheeder,

“These changes will benefit everyone in the yachting industry, from owners and their crews, to charter guests and yacht service businesses.  Most importantly,  bolstering the yacht industry will have a positive economic impact on the residents of St. Lucia.”

Sheeder is especially excited at the prospect of easing visa restrictions for Russian travelers. 

Caribbean yacht charter vacations are extremely popular with Russian customers,” says Sheeder.  “Any steps we can take to facilitate their ability to travel freely will encourage more Russians to visit the islands by boat.”

 

BOOK YOUR OWN PRIVATE YACHT CHARTER

In conclusion, contact the SailAway and 1-800 Yacht Charters destination specialists at https://www.1800yachtcharters.com/book-now-contact-us/ to plan a winter yachting holiday.

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