In these troubled waters we’re all looking for some good news. And in the superyacht charter world it comes in the form of a delay to the proposed changes for VAT on charters in the Mediterranean. Which ultimately means huge savings for those booking charters, specifically those originating in France.
So let’s back up a bit and take a look at what had been planned. In December 2019, the European Commission asked Italy, France, Malta, Cyprus and Croatia to modify their VAT practices with regards yacht charter in order to close a loophole whereby yachts can cruise into international waters to obtain a VAT reduction.
In response France and Italy had planned to implement these changes from 1st April 2020. However, the coronavirus pandemic affecting much of the world has caused a delay and these VAT changes have now been postponed. While France has officially announced the postponement, it is expected that Italy will do so too.
The new reform proposals would have meant that VAT reductions would only be subject to the amount of time the yacht spends in international waters (classified as 12 nautical miles off the coast), and not for the duration of the charter as is currently the practice.
What this now means for yacht charterers is that they can secure the flat-rate VAT reductions for any charter contract signed before the new policies eventually come into place. When that may be, we don’t know, but it is likely to come into effect when the coronavirus situation settles down. So if you are considering a yacht charter in France and the Mediterranean this summer, then now is the time to get planning. You will be able to make the most of not having to spend extended amounts of time in international waters, or incurring VAT costs.
To find out which yachts are raring to go this summer give the team at TJB Super Yachts a call and let’s start planning something to look forward to.