APA: The lowdown on VAT

June 13, 2017 1:17 pm Published by
The situation surrounding the charging of VAT on APA has long been an area of much contention; not least as it’s often been seen as a constant source of VAT leakage.

Spain has looked to clarify its position which is broadly now as follows:-
  • If the APA expenses are invoiced directly to the end user (i.e. the charter guest) who typically has no right of recovery of VAT then the APA amount in the charter agreement should not have VAT applied (so as to avoid double taxation).
  • If the APA expenses are invoiced to the owning company, who would typically have the right to deduct the input tax from the suppliers, then VAT must be charged on the APA.
This avoids the VAT leakage in that somewhere in the chain there is an irrecoverable charging and payment of VAT and follows a similar line to that of Italy. France continues to adopts a broad brush approach in that APA is out of the scope of VAT under standard MYBA terms.

nb. The information provided is correct at time of publication and is subject to change. Always seek proper advice. Feel free to contact us for further information surrounding any Vat/Tax or other Yacht related queries. team@pelagosyachts.com

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This post was written by Declan O'Sullivan