“Spanish IVA (VAT) remains at 21% – nearly double the typical fees found in other EU countries,” states Jana Sheeder, President of SailAway Yacht Charters and 1-800 Yacht Charters. Sheeder adds, “A myriad of permits and registration requirements makes it difficult for charter vessels to commit to cruising in Spain.Without Spanish registration, these yachts cannot begin and end a charter within Spanish waters. So the combination of administrative burdens and high IVA keeps most charter yachts out of Spain.”
Sheeder explains,“The tax has not been eliminated. The Ministry was careful to use the words, ‘Ceased to be applied.’ While we expect the Spanish Parliament to vote in favor of the Ministry’s position on the matriculation tax, there is no guarantee that a future administration won’t vote to reinstate it.”
Still, the abolishment of the matriculation tax is a step in the right direction. Parliament’s approval is expected within the next few months and the new exemption should be in place in time for the summer 2014 charter season.
This entry was posted in Educational News and tagged SailAway Yacht Charter Consultants, luxury yacht charter tax, Jana Sheeder, president of 1-800 Yacht Charters, Spain yacht charter, VAT, Balearic yacht charter, IEDMT (Impuesto Especial sobre Determinados Medios de Transporte), matriculation tax, IVA, what is VAT
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We return to the VAT subject from July. We previously informed our readers about the new French VAT regulations on yacht charters. The VAT applies to yacht charters in France.
New regulations exist. The new regulations apply from 15 July 2013 to charter agreements for yachts for the purposes of leisure travel.
We sat down with Jana Sheeder, President and corporate Maven of SailAway Yacht Charter Consultants and 1-800 Yacht Charters, to review the answers to the three most frequently asked questions regarding the new rules.
“The rate has been set at 19.6% and will increase to 20% on January 1, 2014. However, the taxable base can be reduced by 50% if the yacht is used outside European Union territorial waters, which by definition extend out 12 nautical miles from the coastline. Thus, if you started a charter in Nice, France, and cruised out beyond the 12 nm limit, and concluded the trip the next day in Sardinia, the tax would drop to 9.8%.”
“No. The law reads VAT is applicable on the charter if the vessel is put, ‘…at the disposal of the charterer in French waters.'”
“Not at all. It is the responsibility of the yacht owner to make the necessary arrangements to register his or her vessel with the French taxing authorities. As to the collection and processing of the tax, most owners are hiring local French-based fiscal agents.”
“As charter consultants, our responsibility is to clearly explain the new regulations to our clients. Many are repeat charterers who cruised multiple times in France in the past. For some, it will be a shock to hear their next Western Mediterranean yacht charter vacation may be subject to a tax of nearly 20%. We will work with them to modify their itineraries, in an effort to mitigate as much of the tax liability as possible.”
Drop us an email at info@1800yachtcharters.com, and we will respond right away.
Contact 1-800 Yacht Charters at https://1800yachtcharters.com/book-now-contact-us/
This entry was posted in News Educational and tagged cannes france yacht charter, South of France yacht charter, VAT, yacht charter maven, what is VAT, Q&A, france yacht charter, VAT questions, VAT in France, French taxes, faq's, yacht charter questions, maven, Frequently Asked Questions, mitigation
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The cost of enjoying a Mediterranean yacht charter vacation may be going up as new rules, and confusion, regarding taxes on commercial yachts go into effect.
In the past, luxury mega yacht charter vessels in the Mediterranean were often exempt from paying a French Value Added Tax (VAT or sometimes referred to as, TVA) on both the value of the charter and on any fuel and provisioning. Recently, increased pressure from the European Union to bring French law into line with the rest of the union states has resulted in the European Commission forcing the French Government to amend its rules on exemptions.
“In the past, a yacht used solely for commercial activity would hire a permanent crew and register as a commercial vessel to obtain an exemption from paying the VAT. Under the new rules, the same activity, crew, and registration rules apply, but there is a catch – the yacht ‘must be used for navigation on the high seas.‘”
It is this new wrinkle that has Sheeder and the yachting industry confused. “So far, the French government have not defined or clarified what is meant by the term, “used for navigation on the high seas.“
A manager of a fleet of mega yacht charter vessels in France, who wished to remain anonymous, echoed Sheeder’s concerns. “At what point does ‘high seas’ come into play? Ten miles off shore? Twenty miles? No one knows,” the manager said.
For now, it remains a game of wait-and-see. Industry lawyers are closely monitoring this situation, and conferences are planned in London and Monaco in the coming weeks to keep charter professionals up to date. “While we are not charging the VAT to any of our clients, we are clearly explaining the potential tax liability they may incur, perhaps even after the conclusion of the charter.“
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This entry was posted in Yacht Charter Educational and tagged Mediterranean yacht charter, Jana Sheeder, president of 1-800 Yacht Charters, VAT, maritime attorneys, French customs
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In late November 2012, a European Union commission stated that the VAT exemption on chartering yachts in France is not compliant with EU VAT rules. France will now be required to take steps to remove the exemption from its tax legislation within two months, a ruling prompting one tax expert to say that France, “…cannot be regarded as a paradise for yachts anymore.”
Yachts in Cannes France
Jana Sheeder, President of 1-800 Yacht Charters explains how clients have escaped the VAT in France, until now.
“The rules for chartering yachts in the European Union changed back in 2010. Basically, chartering a yacht for less than 90 days requires VAT to be paid in the country where the chartered trip departs. France was able to avoid this ruling for many yachts by claiming that vessels registered as ‘commercial’ yachts could remain VAT exempt. To save thousands of Euros in tax-related expenses, we would only promote commercial yachts to our clients considering a cruise in France. Unfortunately, that option appears to be ending.”
“The process might be delayed by political lobbyists who represent the interests of the vast French yachting sector, ” says Sheeder. “The French government will be pressured to find a way to prevent a massive exodus of yachts from French ports to other destinations with more favorable tax environments.”
This entry was posted in Yacht Charter News Educational and tagged how to book a yacht charter], Mediterranean yacht charter, VAT on yachts, Cannes, VAT, france
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France’s efforts to seek an exemption from VAT on yacht rentals has failed, and starting July 15, 2013, charterers can expect to pay an additional 9.8% for their Côte d’Azur yacht charter.
For years, the majority of Mediterranean yacht charter vessels based in France were registered as commercial vessels. This is a strategy that allows their owners to sidestep VAT on the purchase of fuel and on the prices charged for charters. The European Union prevailed in court to force France to follow EU VAT guidelines. Beginning July 15, charters are subject to the nearly 10% fee.
“We are investigating other countries in the European Union as alternative Mediterranean yacht charter destinations. Gibraltar, for example, has no import duty for yachts over 18 meters – and no VAT.”
This entry was posted in Educational News and tagged Jana Sheeder, president of 1-800 Yacht Charters, cote d'azur, where is the best destination for a charter?, VAT, where to charter a yacht?, how to book a yacht charter], france yacht charter, VAT in France, Gibraltar, SailAway Yacht Charter Consultants, Mediterranean yacht charter
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VAT taxes on yacht charters
Every summer, hundreds of well-heeled travelers migrate to the Western Mediterranean. They travel there to enjoy a private yacht luxury charter vacation. Coastal towns like Nice and St Tropez in France participate. San Remo and Portofino in Italy also host dozens of superyachts. The boats bring charterers from around the world. It is an affluent vacation. Even the wealthy cringe. Specifically when their exclusive yacht rental holiday receives VAT charges often in excess of 12%. They know the value of their hard-earned dollars. We make sure that their memorable and valuable vacation funds are spent wisely.
Imagine spending €725,000/wk to rent a yacht. For example, Admiral superyacht PLANET NINE as your holiday hire. Just envision incurring an additional €87,000 in VAT? Ouch!!!
Over the years, we composed many blogs about the challenges of VAT taxes. Yacht rental guests need to stay aware of the laws. In some years, yacht charters were VAT exempt. In others, the exemption was rescinded. The rates go up, down, and often vary among various European Union countries, like France, Spain, and Italy.
Fortunately, with a little advance planning, it might be possible to reduce your charter’s VAT liability by up to 50%. Jana Sheeder, our company’s President explains:
“If you rent a luxury yacht for a vacation in the South of France, say, Nice, Antibes, Cannes, and neighboring Monte Carlo (in the principality of Monaco), you will incur a VAT charge of 12%. However, if leave European Union waters during your charter, the VAT is reduced by 50%. The easiest way to accomplish this is to schedule an overnight run to the island of Sardinia, off the French coast. Spend a day of so in the area, then cruise back to the South of France. Not only is this a worthwhile itinerary, you’ll also enjoy a tremendous discount in your VAT expenses.”
To accomplish this, and to be in full, legal compliance with the European Union statutes, Jana adds a clause. In specific, to the client’s yacht charter agreement that reads, in part,
“It is agreed between the parties that the yacht will cruise in international waters for part of the itinerary, which has not been determined, so VAT will only be charged on the 50% of the charter fee. In the event the yacht does not cruise in international waters and VAT becomes due on the total amount of the charter fee, the charterer hereby agrees to pay the outstanding VAT on the total amount of the charter fee in cleared funds and without delay to the stakeholder. VAT is calculated with a lump sum reduction of the time spent in EU waters in application of BOI-TVA-CHAMP-20-50-20-20120912 Article 90.”
In addition to reducing VAT expenses in France, it’s also possible to find similar savings in other Western Mediterranean destinations. Similar money-saving strategies apply for charter yacht luxury vacations in Italy as well.
For example, if a charterer wants to start and end a 10 night trip in Naples, Jana will encourage the client to end the charter in Sardinia, to the west, or Sicily to the south, in order to cruise through international waters, and qualify for a reduced VAT fee.
In conclusion, with just a little advance planning, it’s possible to save thousands of dollars on your next luxury rental yacht vacation!
This entry was posted in Educational Yacht Charter News and tagged Mediterranean yacht charter, how to save money on a yacht charter, Jana Sheeder, president of 1-800 Yacht Charters, vat taxes, yacht charter Italy, lower taxes on yacht charters, Jana L. Sheeder, Planet Nine, VAT, yacht charter video, Video, save money on vat, yacht video, Jana says, yacht charter France, president
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Many of her clients are still onboard their yachts enjoying their 2013 year-end St Barts yacht charter vacations. Jana Sheeder, President and Co-owner of SailAway Yacht Charters and 1-800 Yacht Charters comments. She takes a few minutes to reflect on the year that was (and offers us a glimpse of what’s to come in 2014.
Q: The charter industry still seems to be recovering from the global economic downturn of the past couple years. Did 2013 represent an uptick in the volume of charter business?
Sheeder: “Our research indicates 2013 showed significant improvement in charter revenues when compared to both 2011 and 2012. Many newly-built yachts enter the charter marketplace in 2013. These are builds that had stalled while under construction during the height of the downturn. As the global economy began to pick up, delayed construction projects commenced.
The result is a beautiful new fleet of superyacht charter vessels that hit the seas in time for the 2013 summer Mediterranean charter season.”
Q: Did the year end on an uptick?
Sheeder: “We haven’t seen any industry data yet, so we can’t speak for our competitors. We can tell you in terms of the Caribbean yacht charter marketplace, SailAway (1-800 Yacht Charters) had its strongest December in over 3 years. While the inquiries for smaller vessels did not grow, our bookings of superyachts – some of the largest yachts in the world – increased significantly.
Presently, we have the two largest charter vessels currently docked in St Barts for 9 night charters – motor yacht LAUREL (240 feet, $525,000 per week) and the Lurssen yacht charter motoryacht MARTHA ANN (230 feet, 600,000 EUROS per week).”
Q: What was the biggest change you witnessed in 2013 in the charter industry?
Sheeder: “I would have to say the ending of VAT exempt charters in France. For many years, our clients enjoyed St. Tropez yacht charters and summer vacations along the Cote d’Azur, free of the burden of VAT. That all changed in the summer of 2013 when the French yacht charter VAT went into effect. As of July 15, 2013, charterers can expect to pay an additional 9.8% for their Côte d’Azur yacht charter.”
Q: Are you optimistic as you look ahead to 2014?
Sheeder: “Our team is extremely optimistic as we focus on incremental growth in 2014. During the economic downturn, while many of our competitors hunkered down to ride out the storm, we took a contrarian approach. We focused our efforts on increased marketing. Our strategy was simple – stay in touch with existing clients and prospects. We wanted to be “easy to find” once the economy turned around.
Internally, we call it our “Tip of the Tongue” project. Clients had tightened their belts during the downturn, and we were committed to be the brand they remembered (always on the tip of the tongue) when they were ready to loosen their discretionary income belts again!
Now that 2014 is here, we are excited to announce that, for instance
The sky’s the limit! It will be an exciting, challenging, and awe-inspiring year!”
This entry was posted in News Educational and tagged Lurssen, president of 1-800 Yacht Charters, martha ann, St. Barts yacht charter, yacht charter industry, largest yachts, VAT, SailAway Yacht Charter Consultants, Laurel, Vertige, Lurssen yacht charter, industry news, Mediterranean yacht charter, year-end vacation, maven, Jana Sheeder
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You would think Delivering The Superyacht Experience™ to boating clients would be pretty straightforward: A client expresses interest in a yacht for a family vacation. The charter broker presents several options. The client makes a selection.
In reality, it’s not nearly so clean and to the point. At least not for the handful of super-brokers who handle the world’s elite travelers.
Just ask luxury yacht charter maven Jana Sheeder, President of 1-800 Yacht Charters.
According to Sheeder, matching a yacht to the client’s budget is just the starting point.
“While our clients are most interested in a yacht’s layout, amenities, and price, we dig deeper – into the yacht’s registration, the nationalities of the crew, and any governmental regulations and laws that might impact the success of the charter and comfort and respect of our clients.”
In addition, Sheeder mentions the rules affecting yachts for hire in Spanish waters. “We’ve seen a significant increase in interest in Spain, particularly Balearic Islands yacht charter vacations,” says Sheeder. “Many yachts based in the South of France and Monaco are willing to deliver to the Balearics to accept theses charters. However, yachts not in possession of a Spanish charter license are at a significant disadvantage, and face restrictions as to where the charter can begin and end, and what nationalities are permitted in the crew. Something as simple as bringing on a Spanish resident to offer therapeutic massages to the charter guests could be a problem if the yacht is not licensed for charter in Spain.”
Sheeder and her staff monitor other licensing and legality issues. For instance:
“Not understating these regulations and laws can result in a negative experience for the charterer and guests, and in some cases increase the overall cost of the charter by 10% or more – a significant sum considering many charters are priced in the €500,000 to €1,000,000 per week range.”
Currently, Sheeder is monitoring the possible impact of French social security tax responsibilities on yacht crews. In March 2017, a decree was passed to require crewmembers and their non-French employers (the yacht owners) to make contributions to ENIM – the French mariners’ social security agency. Any yachts and crews spending more than 90 consecutive days in France or French waters are subject to the tax. The decree was suspended Sept 13, following a disastrous summer tourist season that saw France luxury yacht charter revenues plummet by 40%.
Sheeder is waiting to see if the decree is actually overturned in 2018, or if it will come back in a modified form. “These increased costs associated with crew wages end up being are passed on to the charterer, in the form of higher rates for yacht rentals,” says Sheeder. If the decree is reinstated, Sheeder plans to either offer her clients yachts with French crew, or to convince them to bypass French waters and charter elsewhere in the region.
Do affluent charter clients realize the level of detail involved in orchestrating a vacation on a superyacht? Sheeder chuckles at the question: “Probably not, but that’s fine with us. It’s like an attorney getting your traffic ticket dismissed in court. You don’t care how he or she does it – as long as you don’t have to pay the ticket! It’s a similar scenario for us – we obsess over the small details in order to deliver a memorable vacation experience to our clients. A pat on the back is nice, but a satisfied charterer who becomes a repeat customer is even better!”
This entry was posted in Educational News and tagged rules, superbrokers, Superyacht Trends, VAT, super-broker, motoryacht charter, superyacht crew, maritime law, Jana Sheeder, social security, Monaco yacht charter, yacht crew, Laws, president of 1-800 Yacht Charters, the superyacht experience, sustainability, 1-800 Yacht Charters, yacht charter Balearics, The Superyac, Personal Watercraft (PWC)
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“In each of the past three summer seasons, we have seen an increase in interest in Dalmatian yacht charter adventures in Croatia,” says Sheeder. “We are advising our clients to budget not only for the increase in VAT, but also for the higher excise taxes on fuel that were approved in November. In short, the cost to enjoy both a Croatia bareboat rental or a fully crewed yacht vacation will cost about 5% more in the summer of 2014.”
This entry was posted in Destinations News and tagged Croatia, Waterfalls, sailboat charter, president of 1-800 Yacht Charters, VAT, sailing yacht, yacht charter croatia, Eastern Mediterranean yacht charter, luxury yacht charter croatia, VAT value added tax, Destinations, Jana Sheeder, 1800yachtcharters
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Today’s blog involves the end of the France VAT exemption. Back in February, we speculated the cost to rent a private yacht in the fabled south of France was about to go up, due to a ruling by the European Union the VAT exemption on chartering yachts in France was not compliant with EU VAT rules. Now, France’s efforts to seek a VAT exemption have failed, as the European Court of Justice has ruled the French tax exemption for commercial vessels is illegal.
On March 21, the European Court of Justice (in European Commission v. France; C-197/12) had a belief. It held that French legislation providing a VAT exemption for some commercial vessels used for navigation on the high seas. Specifically that carry passengers for remuneration or are used for commercial activities. “…does not comply with Directive 2006/112/EC (the VAT directive), specifically with article 148(a), (c), and (d).
“ The approach of the summer charter season is at hand. Yacht managers and owners are scrambling. In specific, to make sure all paperwork is in compliance with the ECJ’s ruling.”
This entry was posted in Educational Yacht Charter Destinations News and tagged yacht charter France, Mediterranean yacht charter, VAT, what is VAT, European Court of Justice, yacht charter med, where do they charge VAT, end of france vat exemption
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