Yacht Engaged in Trade or “YET” is a mechanism whereby Non-EU resident owners operating yachts of over 24 metres predominantly on a private pleasure basis, can undertake limited charter. Although the yacht may cruise freely throughout the EU on a private pleasure basis, charter activity can only commence in France or the Principality of Monaco. Discussions are ongoing with the Italian authorities to enable charters to also start in Italy however no imminent resolution is expected.
The period of charter is limited to 84 days per year although the yacht must maintain full commercial compliance all year round and can expect to be inspected by the authorities as such.
Traditionally utilised by Temporary Admission (“TA”) yachts, under the YET scheme the 18 month clock is frozen for periods of commercial use. Owners of VAT paid yachts are also eligible to operate under the YET scheme which is available under both Marshall Islands and Cayman Islands flag registrations.
Historically yachts operating under the YET were able to charter to both EU and Non EU resident charterers however, the introduction of the new Union Customs Code in 2017 lead to various interpretations around the subject of EU residents onboard yachts operating under Temporary Admission.
In 2018 we saw the Spanish authorities leading the way following the omission of the specific reference to “private purposes” in the new Code; this resulted in the understanding that yachts undertaking charter activity could only charter to Non-EU residents. There are conflicting reports in relation to France however in the absence of clarity, charter activities under the YET scheme in France are limited exclusively to Non EU residents.
For a Non- EU owner who wants the freedom to operate privately with the occasional charter then this could be attractive. One such market could be US owners wishing to cruise for a season in the Med without the need to put in place alternative structuring arrangements. For owners who want to charter their yacht for a number of weeks every year then a full commercial structure would still seem to be the most appropriate option.
All details are correct at the time of publishing.