Private Use

The VAT position when importing a superyacht into the EU for private use is subject to complex VAT regulations which are influenced by whether the yacht is EU-flagged or non-EU flagged, the residency of the owner of the yacht, whether VAT has already been paid and the intended duration of the stay in EU waters.

When a yacht is brought into the EU customs territory it is considered an import of goods.  VAT is determined at the time of import and based on the value of the yacht.  The applicable VAT rate depends on the EU country of import.  Point of entry into the EU determines the Member state where VAT is initially due, unless the yacht is immediately transported under customs procedures (e.g. transit or temporary importation).  Popular ports of import choices for VAT efficiency include Malta, Cyprus, France and Italy.

Where VAT has been paid in one EU member state, the yacht is generally considered to be in ‘free circulation’ and may move freely across with EU without paying VAT again. However, valid proof of VAT payment should be retained.  It should also be noted that if you take the yacht out of the EU for a long period of time (generally more than three years), then the “VAT paid” status may expire, and you may need to pay VAT again on re-entry.

If the owner of the yacht is a non-EU resident, you may import the yacht on a Temporary Admission Scheme for up to 18 months without paying VAT.  This is a customs exemption not a tax relief.  The yacht must be non-EU flagged, and the owner must be a non-EU resident.

Commercial use

The VAT position when importing a superyacht into the EU for commercial use, such as chartering, introduces different VAT considerations but there are potential reliefs, deferrals and other efficiencies if this is structured properly.

Commercial use generally means the yacht is made available for charter, income is generated through charter agreements, and the use is demonstrably not private.

How can Boston Family Office Help?

At Boston, our luxury asset management services make the ownership and administration of assets, including superyachts, simple and secure.  We work collaboratively with you and your advisors to design and implement a structure that is built around the needs and goals of the owner, being for simple leisure use, commercialisation of the assets (leasing or chartering), preservation and succession planning and which will be VAT efficient, where applicable.

We are a multi-jurisdictional fiduciary service provider with offices in the Isle of Man, Jersey, Malta and the UK that implement tailored governance solutions to clients. 

Should you wish you to discuss the topic in more detail or interested to hear how Boston Multi Family Office can assist you, please contact us enquiries@bostonmfo.com.