With the advent of a single European VAT area in 1993, all yachts based in or visiting the EU have a potential exposure to VAT. Failure to comply with EU tax regulations can result in the detention or seizure of a yacht, an immediate demand for penalty taxes (often in excess of 25% of the yacht’s value) and/or expulsion from the EU area.
Since the abolition of internal borders many countries have switched their customs resources to patrolling coastal areas, where VAT regulations are now being vigorously enforced.
Pelagos Yachts can individually tailor structures for each client that will minimise or eliminate the effect of VAT and allow for VAT incurred on running and maintenance of a vessel to be fully recovered. These structures are devised in co-operation with some of Europe’s top tax advisors. Working with these specialist advisors, we can turn potential problems into effective solutions.
Our services cover:
- Existing yachts in the EU area where VAT has not been paid
- Yachts wishing to enter the EU
- New yachts being built
A well-conceived and implemented structure will minimise the effect of VAT and avoid any difficulties when evidence of the yacht’s tax status is required.