Dominion Marine have managed the administration of our busy classic yacht for 17 years. They are friendly, attentive and a pleasure to work with.Beneficial Owner, Classic Motor Yacht
Cyprus Leasing Update
We are pleased to advise the Tax authorities in Cyprus have recently set out the guidelines for the leasing of pleasure yachts which are summarised as follows:
- The Lessor must be a Cyprus company, registered for VAT purposes in Cyprus
- The Leasing agreement must be between the Lessor and a Lessee which is a physical person, regardless of the Lessee's place of residence
- The Lessor must remain VAT registered in Cyprus for a minimum of 6 years. Should deregistration happen prior to the 6 years, the Tax Department may request the payment of output VAT on the full value of the yacht at 19%
- A guarantee payment equal to 3% of the yacht's value must be made to the Tax Department
- The voyage records of the yacht must be available to the Tax Department
- If the yacht is not registered under the Cyprus flag at the start of the lease, stamp duty will apply
There are clearly some feasibility advantages to this new lease over the continued uncertainty of the Maltese lease however the duration of the VAT registration along with the 3% guarantee are very clear disadvantages and will concern many in the industry.
There is no “one size fits all” solution for yacht owners in today’s marketplace, and all the alternatives such as registering the yacht as commercial, paying the VAT in full, taking advantage of paying the VAT at a reduced rate in Cyprus or deferring payment through Monaco or Cyprus Rental have their advantages and disadvantages. It all comes down to what suits the client’s requirements!
Dominion Marine are the only corporate services provider that can offer the full suite of ownership solutions to the Superyacht industry - if you would like to know more or use our services alongside us, please do not hesitate to get in touch.