FAQ

Do non-EU flagged yachts have to be imported and in free circulation in order to charter in Europe?

Yes, they have to be imported and in free circulation before starting any charter activity in the Med.

Can the VAT due on Italian charter contracts be reduced in case of an international voyage?

Yes, according to the effective use of the yacht outside EU waters

Is “touch and go” in International waters allowed to benefit from the reduced VAT rate in Italy?

No, “touch and go” constitutes an “abuse of right”. Navigation in international waters must be logical and reasonable in the context of the charter itinerary.

Can the VAT rate be reduced in case of an international voyage in France?

Yes,

• For charter contracts signed UNTIL October 31st 2020 : 20% VAT on 50% of the charter fees and delivery / re-delivery fees (if any) is allowed in case of cruising into international waters.

• For charter contracts signed AFTER October 31st 2020: according to the effective use of the yacht outside EU waters.

Can the VAT rate be reduced in case of an international voyage in Croatia and Spain?

No, in Croatia and Spain VAT rate cannot be reduced for cruising in international waters.

Is VAT due on charters starting outside EU countries on the time spend in EU waters and what is the rate?

• Croatia; Yes, 13% VAT on time spent in Croatian waters

• France & Monaco; No

• Italy; Yes, 22% VAT on time spent in Italian waters and on fuel consumed the same days

• Spain; Yes, 21% VAT on time spent in Spanish waters

Do I need a cabotage (charter) license for cruising in Croatian waters?

Commercial NON-EU flags need to obtains a cabotage (charter) license for cruising in Croatia.

Is it necessary to have a charter license if the charter starts in another country?

If the charter starts outside Spain the charter license will be necessary only if there will be guests embarking and/ or disembarking in Spanish waters. If the charter will only be transiting in Spain, the license is not necessary.

If the charter start outside Croatia, the cabotage (charter) license for non-EU flags will be necessary.

Can privately registered yachts charter in Croatia?

No, neither EU or non-EU yachts.

Can the UBO use his/her yacht in Italy?

Yes, under a charter contract as any other charterer paying the VAT due.

Can the UBO benefit from a reduction on the charter fee on his charter agreement?

Yes, the UBO can benefit from a reduction corresponding to the brokers’ standard commission.

Is VAT charged on delivery and redelivery fees in Croatia?

No, there is no VAT charged on delivery and redelivery fees.

Is VAT charged on delivery and redelivery fees in Italy and France?

YES

How long does it take to obtain a Croatian VAT number?

VAT number is issued within 7-10 days from the moment the Tax Authority receives the complete documentation.

Can a commercial yacht charter in Italy even if it doesn’t qualify for the ICE (Italian Commercial Exemption)?

Yes, it’s not mandatory to qualify for the ICE to charter in Italy. You can continue your charter activities but without benefitting from any VAT exemption on the purchase of supplies in Italy.

Can a commercial yacht charter in France even if it doesn’t qualify for the FCE (French Commercial Exemption)?

Yes, it’s not mandatory to qualify for the FCE to charter in France. You can continue your charter activities but without benefitting from any VAT exemption on the purchase of supplies and services in France.

Can VAT be exempted on goods and services in France?

Yes, if the owning company benefit from the French Commercial Exemption, then goods and services purchased in France for the commercial activity of the yacht can be VAT exempted.

Is it possible for the Owning Company to obtain VAT credit on supplier’s invoices?

YES, only on invoices related to goods and services* connected to the charter activity of the yacht (commercial purposes and maintenance of the yacht) and not connected to the charter’s APA and if input VAT is greater than output VAT.

*contact the Croatian, French and Italian offices for more information

Is VAT due by the charterer on APA at the end of an Italian charter?

Yes, on fuel and oils and on expenses not vat paid at source

Which companies are subject to the so-called Non- Resident Income Tax?

The owning companies who are resident in a country with no dual taxation treaty signed with Spain have to pay the so-called Non-Resident Income Tax, that is 24% on the charter income.