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How Greece’s New Law Will Affect Yacht Charters

posted by Bruce Maltwood

Charter rules in Greece have been pretty relaxed in recent years, despite other EU countries introducing VAT on charters. As long as charters either started or finished outside of Greece then there were no requirements to charge VAT on the charter and, in turn, no requirement to appoint a fiscal agent or apply for a charter licence.

The New Law

France, Italy and more recently Croatia have all followed the lead of Spain by applying VAT (albeit at varying rates depending on qualifying criteria) to charters, but Greece has until now not applied VAT.

On 5th December 2017 a new law was passed in Greece that prohibits non-Greek commercial yachts from embarking or disembarking guests. As a result, all such charters have to start AND finish outside of Greece.

Under the new rules, only yacht owners established in Greece can obtain such a licence, which prohibits anyone else from chartering in Greece.

Following Opposition: The New Law, Take Two

It would appear that this law was introduced to protect the local charter market but, unfortunately, no consideration was given to the large number of non-Greek owned yachts chartering in Greece.

The new law is set to have a massive impact on local businesses and the economy and as such is receiving vigorous opposition from:

  • Agents
  • Marinas
  • Shipyards
  • Mayors on the various islands

This opened a dialogue between the relevant authorities which has seen positive initial feedback and signs that they are indeed open to compromise.

Following these discussions, a new law has been drafted; however, this has not yet been passed by parliament.

A meeting between interested parties from the Greek yachting community and government representatives on 5th May will hopefully provide clarity.

Will it Affect 2018 Charters?

Charter bookings for the 2018 season are already in full swing, so the uncertainty surrounding the new law is sure to have an impact on the level of charters for Greece during the 2018 season.

Some charter brokers are only signing up charters now if they start in Turkey.

Charterers are now being asked to sign a side letter to confirm that they acknowledge the potential VAT liability along with paying VAT at the anticipated rate of 9.6% to be held as a security deposit.

It is expected that it will be possible to obtain charter licences and fiscal representation for non-Greek owned yachts, although the mechanics of how these processes will work is yet to be put together.

Local agents believe we have already lost the 2018 season for charters wishing to embark or disembark guests in Greece.

Charter yachts can still operate by embarking and disembarking outside of Greece provided no guest changes are made.

Alternatively, if the beneficial owner wishes to use their yacht, then they will be issued (if non-EU) with a transit log, which means they are treated as being privately registered, or with a Dekpa (EU cruising document) if EU registered. Under NO circumstances are they allowed to accept money for the yacht’s use; very heavy fines will be imposed if caught and the captain will have to declare that the yacht is NOT in commercial use.

As is often the case, however, there are more questions than answers, so fingers crossed these can be sorted out sooner rather than later.

As soon as we have more news, we will post an update.