Value Added Tax (VAT) is chargeable on boats purchased and owned by residents of the EU “VAT Zone”. VAT is also chargeable on vessels, irrespective of ownership, that spend more than six months in any calendar year cruising in EU VAT Zone waters.
However, some form of legitimate mitigation of potential VAT liabilities is generally available for both pleasure and commercial yachts, particularly when the yacht is purchased through a corporate structure. The options will depend on a comprehensive assessment of the yacht ownership, the operational requirements, as well as the personal financial circumstances of the owner.
RegisterAYacht is able to assist and guide owners as to the most suitable options and, if required, will obtain sound VAT advice from independent and reputable advisors within the yacht industry.
- A VAT paid yacht will encounter no difficulties in EU waters;
- Pleasure yachts that are built pre-1985 and were in EU waters as of 31 December 1992 are treated as VAT paid. Evidence will be required to show that the vessel was in EU waters on this date;
- An EU national can establish residence outside the EU VAT Zone (e.g. Gibraltar) and therefore avail themselves of the Temporary Importation laws.