Change in Charter VAT Rates

Changes to VAT on European charters in 2020

 

Greece has just ratified an EU ruling regarding VAT on yacht charters which affect all charters for 2020 and beyond.

After the meeting between the President The European Committee for Professional Yachting and the Directorate of Tax Legislation, it has been confirmed that VAT reductions on charters earlier practiced in Italy, France, Malta, Greece, Cyprus and Croatia, would no longer apply in 2020.

Earlier, it was possible to reduce VAT on charter services by means of a short-term charter in international waters. The European commission had to ask the above-listed countries to modify their tax practice starting from January 1st, 2020.

The policy aims at unifying conditions and terms for VAT benefits application throughout Europe. Up to now, Italy, France, Malta, Greece, Cyprus and Croatia have been practicing tax benefits upon going in international waters during charter period. Starting from 2020, VAT discounts will be applied only in proportion to the time or the distance a yacht would take outside the European waters.


Until the last few days of February 2020 we were not certain of how rules would be applied in Greece, but the Greek government as now ratified the EU directive, by removing the 50% VAT reduction that was applicable to Yacht charters. This has been made effective for all charters starting after 1 January 2020.

It is a Greek Ministry of Finance decision published on the 10th of February 2020 (Decision No A1018/2020).

We contacted the Ministries of Marine & Finance, Tax Authorities and the Hellenic Union of Commercial Boat Owners right after the publication and most of them had little knowledge of the change to the law. We imagine that the Tax Authorities have not yet received officially (through the Ministry of Finance) this decision, they learned about it from us.

The  President of the Hellenic Union of Commercial Boat Owners met with the Vice Minister of Finance last Friday but there was no significant outcome. The only information he gave, is that they will review it and publish clarifications.

Protests have started in connection with the new law but there is no indication if they will be successful. We don’t believe there will be a change to the law as it European, the best we can hope for would be that the start will be deferred so not to affect pre booked holidays.

Effect to our clients The current VAT rate in Greece is 24% on yacht charters until 1 January 2020 this was reduced by 50%. Under the new rules the full amount of VAT will have to be charged by law, and we are legally obliged to collect VAT at the rate ruling at the time of your charter.

  1. a) The VAT inclusive prices on our website have been adjusted to include the new VAT rate and will be applicable to all future bookings.
  2. b) Previously booked holidays will be reconfirmed reflecting the new VAT rates as our terms and conditions clause 21 below. (New statements of account will be issued shortly).
  3. c) If there are any further revisions or relaxations with regard to this new ruling we will advise accordingly.

SAIL IONIAN  28/02/2019

 

Other points of reference

There are few references to be found on the internet relative to Greece. In Italy and France there are more comments, but the same problem exists.

https://www.the-triton.com/2020/02/france-italy-change-med-charter-vat-laws/

https://yachtharbour.com/news/vat-reduction-on-european-charters-to-change-in-2020-3586

https://www.superyachtnews.com/business/questions-remain-over-new-charter-vat-regime

https://barnes-yachts.com/breaking-news-eu-vat-reductions-are-no-longer-applicable-in-2020/

This post was written by admin