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
1st April Deadline Fast Approaching
The EU have recently ruled that ALL charters in European Waters will now be subject to VAT at the full rate, with the new regulation coming in to force on 1st April 2020.
Owners of commercial yachts will therefore have to pay VAT at the full rate on the commercial charter fee on all their charters (i.e. their usage). So, for example, if an owner was paying the discounted rate of 10% VAT on their charter last summer, then this is simply going to double and the impact of this new regulation is going to be far reaching and very costly.
In anticipation of this widely expected announcement, Dominion Marine has obtained written approval from both the Monaco and Cyprus Authorities allowing our clients with private yachts under the applicable Rental Solution to engage in occasional third party charters, provided that:
a. The rental is fully paid up;
b. The charter activity is not the principal activity of the company;
c. The charter complies to the regulations of the Flag State;
d. The charter complies to the regulations of the jurisdiction in which the charter commences.
When using their yacht, the client will not require a charter contract nor pay additional VAT therefore giving them far more flexibility in their usage.
1) Value of the Yacht - €25 million
2) Yacht is under the Rental Solution through Monaco
3) Weekly Charter Rate - €300,000.00
4) VAT rate (France) – 20%
Weekly VAT payable when the owner uses the yacht under normal commercial operations - €60,000 per week
Minimum Annual VAT under the Rental Solution in Monaco - €150,000 per year
Therefore, if the client uses their yacht for 5 weeks of the year, the total VAT payable would be €300,000 and obviously this would increase with every extra day the client uses the yacht. However, there is unlimited usage for the client when the yacht is managed under the applicable Rental Solution. The savings are clearly there to see!
Why not check if your clients yacht will be best managed under the increasingly popular Rental Solution by visiting our VAT calculator or by contacting us directly on +44 1624 682400: