Lauren O’Neill met up with Adrian Jones at the London Boat Show’s diamond anniversary event to get an update on VAT matters affecting the industry at a time when the industry is demonstrating optimism and confidence for the months ahead.
LO: Adrian, there was optimistic buzz about the yachting market at the show, what is your opinion on the market outlook for 2014?
AJ: I have experienced a definite increase in enquiries and advice work in the last six months – both on existing projects, but importantly also on new builds and purchase contracts. While this is not a definitive test for how the market is moving, because I do handle other work on Customs inquiries or VAT in general, I do feel more confident about 2014.
LO: What in your opinion are the major VAT matters for 2014?
AJ: The two key concerns for me for 2014 where VAT and tax is concerned is how any changes to the French Commercial Exemption will develop and how the extension to the Spanish Matriculation Tax exemption will be applied in practice. It would be good to see the Spanish yacht charter market expand while any further loss to exemptions in France will be watched nervously by local providers in France as this removes a valuable fiscal advantage for them.
LO: Industry has widely accepted ‘free circulation’ in yachting to mean the coming and going of vessels without restriction. However a recent case of a large yacht being arrested in Spain has questioned this, what is your view?
AJ: This is clearly a concern for the industry. Free circulation is a term given to goods, including yachts, that are Customs cleared into EU Customs territory. This Customs cleared status can also be lost and this is what the Spanish authorities have argued has happened in this case – effectively not granting an automatic right to recover this status on the yacht’s return. It is a very technical point that the Spanish authorities have put forward. My view is that the law has not been drafted in the way intended but it is something that other owners will have to consider carefully when entering the EU via Spain, or even better, consider when departing the EU and also when choosing a registry for their yacht.
As ever, I would recommend taking professional advice when there is any doubt about the Customs or VAT treatment of a particular transaction or issue – but as a VAT advisor that’s maybe what you would expect me to say!
A big thank you to Adrian for his time during the show, if you have any questions please do not hesitate to contact Adrian Jones email@example.com or Lauren O’Neill firstname.lastname@example.org for further information.