If you’re planning to charter a yacht, it’s important to understand how Value Added Tax (VAT) is calculated on yacht charters. VAT is a tax that is applied to most goods and services in Europe, including yacht charters. The rate of VAT can vary depending on the country where the yacht is chartered, and the rules and regulations around VAT can be complex. Here’s a closer look at how VAT is calculated on yacht charters.
The first step in calculating VAT on a yacht charter is to determine the applicable VAT rate. In most cases, the VAT rate will depend on the country where the yacht is chartered. For example, in France, the standard VAT rate is currently 20%, while in Italy, the standard rate is 22%. Some countries may also offer reduced VAT rates for yacht charters, depending on factors such as the length of the charter or the size of the yacht.
Once the applicable VAT rate has been determined, the next step is to calculate the VAT due on the charter fee. The VAT is calculated as a percentage of the total charter fee, including any additional charges such as fuel, food and beverages, and other expenses. For example, if the total charter fee is €10,000 and the VAT rate is 20%, the VAT due would be €2,000.
It’s worth noting that VAT may also be due on any goods or services that are provided during the charter, such as crew gratuities, equipment rentals, or shore excursions. These additional charges may be subject to VAT at the same rate as the charter fee, or they may be subject to a different rate, depending on the regulations in the country where the yacht is chartered.
Another important consideration when calculating VAT on yacht charters is whether the charter is subject to the rules and regulations for commercial or private yachts. Commercial yachts are typically subject to more stringent VAT regulations, including requirements for VAT registration, invoicing, and reporting. Private yachts may be subject to different rules, depending on the country where they are chartered.
Overall, calculating VAT on yacht charters can be a complex process, and it’s important to work with a knowledgeable operator or broker who can help you navigate the regulations and ensure compliance. By understanding the applicable VAT rate, calculating the VAT due on the charter fee and any additional charges, and complying with the relevant regulations, you can enjoy a safe and legal yacht charter experience.