“Understand the risks and benefits and know your way out, before you venture in…
Jonathan Watson, head of yachting at MFB Solicitors, explores the continued relevance of the VAT paid status.
VAT is a competitive business. Each administration in the Customs Union fights with the other to be the one to whom you owe your tax. Large member states force you to pay it to them by using muscular tax laws with extra-territorial reach. Small ones incentivise you to pay it to them with discounts and exemptions. For years, Malta had the edge when it came to superyachts, offering a quick and cheap way to become VAT-paid. They could get you there at an effective rate of 5.4% after only a short period of charter. It became too fast, too slick and too much for the rest of the EU.
Read the full article here.