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Managing VAT

Any yacht owner who is planning to operate in the EU must consider VAT. Sarnia can provide a variety of different structures to help manage your VAT obligations.

The optimal structure is chosen according to:

  • The yacht size and value
  • Its current VAT status
  • The current ownership structure
  • Whether it is used privately or commercially
  • The planned cruising area
  • The location of the yacht
  • The residency/nationality of the beneficial owner

VAT structures provided by Sarnia Yachts:

Operational Lease 

Primarily for EU resident owners, an operational lease is a consideration for a pre-defined period of ownership. Unlike Maltese Leasing which is no longer available,  under an Operational Lease, no VAT paid status is obtained at the end of the term.

VAT Management

For commercially operated yachts, the yacht owning company will be VAT registered at at the appropriate jurisdiction and will operate as a commercial enterprise allowing recovery of VAT where applicable.  

Temporary Admission

These rules apply to non-EU resident owners who wish to use their yacht privately in the EU. Use is limited to 18 months after which the yacht must be removed from the EU before re-entering under the same rules.

French (FCE) & Italian (ICE) Commercial Exemption

Commercially operated yachts operating in France and Italy can take advantage of the FCEICE rules for both VAT on the yacht itself and ongoing supplies.

There are a number of criteria that must be met for FCE/ICE. Read our latest articles to learn more.

Yacht Engaged in Trade (YET)

For non-EU resident owners that wish to undertake a mixture of private and commercial operation within the EU, the YET scheme enables 84 days charter use per annum in addition to the private use of the yacht. The area of charter use is however restricted. 

Our Expertise

VAT structures are complex and there are many factors to consider. Sarnia will work alongside your existing yacht broker or financial management teams, bringing our team’s experience to get the job done.

Sarnia will consider many different factors before recommending the ideal VAT structure for a client:

  • Does the client require a full structure or do they already have a company to act as owner?
  • Nationality of the owner?
  • Residency of the owner?
  • What is the current VAT status of the yacht (Non-VAT paid [TA], VAT paid, VAT mitigated/deferred, or exempt)?
  • Has the yacht been formally imported into the EU?
  • Geographical area and specific countries of use?
  • New yacht or second-hand
  • Current flag/port of registry of the yacht?
  • Private pleasure or charter use?
  • Is the yacht commercially compliant?
  • Length of the yacht?
  • Tonnage of the yacht?
  • Where will the yacht be lying at the time of purchase?
  • The current value of the yacht?

We advise owners on existing structures and offer sound advice to ensure long-term security.