VAT on yacht chartering: VAT registration on chartering activities

There are specific rules on the lease of vessels that often require a VAT registration, fiscal representation and other formalities to be met. Penalties will apply if these rules are not regarded. Tax and customs authorities may even seize the boat with the passengers onboard!

As a general rule, a foreign business carrying out a boat charter activity must register for VAT in each country where the customer accesses the boat for the first time. For example, if you charter a yacht for a period of one week and the customer accesses the boat in Mallorca, you should get a Spanish VAT number and account for Spanish VAT on the entire value of the invoice to that customer. However, if the customer accesses the boat in Nice, France, you should get a French VAT number and charge French VAT on the value of the invoice (in some instances, you will not charge the standard French VAT rate).

Specific rules apply for charter licenses for periods over 3 months. Also, in case the client accessing the boat is a business customer, a detailed review must be made to decide if domestic reverse charge applies.

A VAT registration is only the first obligation of a long list of compliance requirements. Non-EU companies must appoint a fiscal representative, VAT returns must be submitted, correct invoices must be issued and local VAT and tax requirements should be regarded (Eg. matriculation tax in Spain, use and enjoyment in France, etc).

How can we help you?

Marosa is VAT firm specialized in the yacht and maritime industry in Europe. Our focus is VAT recovery and VAT compliance, including registrations, fiscal representation and VAT returns. Contact us to get advice on how to register for VAT in any European country.

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