“Spanish IVA (VAT) remains at 21% – nearly double the typical fees found in other EU countries,” states Jana Sheeder, President of SailAway Yacht Charters and 1-800 Yacht Charters. Sheeder adds, “A myriad of permits and registration requirements makes it difficult for charter vessels to commit to cruising in Spain.Without Spanish registration, these yachts cannot begin and end a charter within Spanish waters. So the combination of administrative burdens and high IVA keeps most charter yachts out of Spain.”
Sheeder explains, “The tax has not been eliminated. The Ministry was careful to use the words, ‘Ceased to be applied.’ While we expect the Spanish Parliament to vote in favor of the Ministry’s position on the matriculation tax, there is no guarantee that a future administration won’t vote to reinstate it.”
This entry was posted in News Educational and tagged Jana Sheeder, president of 1-800 Yacht Charters, Spain yacht charter, VAT, Balearic yacht charter, IEDMT (Impuesto Especial sobre Determinados Medios de Transporte), matriculation tax, IVA, what is VAT, luxury yacht charter taxPosted on
In July, we informed our readers about the new regulations imposing French VAT on yacht charters taking place in that country.
The new regulations will apply from 15 July 2013 to charter agreements for yachts for the purposes of leisure travel.
We sat down with Jana Sheeder, President and corporate Maven of SailAway Yacht Charter Consultants and 1-800 Yacht Charters, to review the answers to the three most frequently asked questions regarding the new rules.
Question #1: What rate will apply to French charters after 15 July?
“The rate has been set at 19.6% and will increase to 20% on January 1, 2014. However, the taxable base can be reduced by 50% if the yacht is used outside European Union territorial waters, which by definition extend out 12 nautical miles from the coastline. Thus, if you started a charter in Nice, France, and cruised out beyond the 12 nm limit, and concluded the trip the next day in Sardinia, the tax would drop to 9.8%.”
Question # 2. Does it apply if the charter starts and ends outside France?
“No. The law reads VAT is applicable on the charter if the vessel is put, ‘…at the disposal of the charterer in French waters.'”
Question #3. Will charterers need to be involved with VAT registration and compliance in France?
“Not at all. It is the responsibility of the yacht owner to make the necessary arrangements to register his or her vessel with the French taxing authorities. As to the collection and processing of the tax, most owners are hiring local French-based fiscal agents.”
“As charter consultants, our responsibility is to clearly explain the new regulations to our clients. Many are repeat charterers who cruised multiple times in France in the past. For some, it will be a shock to hear their next Western Mediterranean yacht charter vacation may be subject to a tax of nearly 20%. We will work with them to modify their itineraries, in an effort to mitigate as much of the tax liability as possible.”
This entry was posted in News Educational and tagged Frequently Asked Questions, South of France yacht charter, VAT, yacht charter maven, what is VAT, france yacht charter, VAT in France, faq's, yacht charter questions, maven, mitigation, cannes france yacht charterPosted on
Back in February, we speculated the cost to rent a private yacht in the fabled south of France was about to go up, due to a ruling by the European Union the VAT exemption on chartering yachts in France was not compliant with EU VAT rules. Now, France’s efforts to seek a VAT exemption have failed, as the European Court of Justice has ruled the French tax exemption for commercial vessels is illegal.
What does the ruling mean?
On March 21, the European Court of Justice (in European Commission v. France; C-197/12) held that French legislation providing a VAT exemption for some commercial vessels used for navigation on the high seas that carry passengers for remuneration or are used for commercial activities, “…does not comply with Directive 2006/112/EC (the VAT directive), specifically with article 148(a), (c), and (d).
“ With the approach of the summer charter season at hand, yacht managers and owners are scrambling to make sure all paperwork is in compliance with the ECJ’s ruling.”