Superyacht VAT & Private Ownership

For a privately owned yacht cruising in the European Union, superyacht VAT is the central question. Private ownership requires VAT to be accounted for on the value of the yacht, but not necessarily paid. There are three main ways of doing it, each suited to a different kind of owner.

1. Pay VAT on the value of the yacht

The simplest route is to pay VAT once on the yacht’s value. The lowest rate typically paid is 18%, in Malta. Once VAT is paid, anybody can use the yacht freely in EU waters, without limitation. This suits EU-resident owners, and owners who want family and friends to use the yacht without them on board.

2. Use the Maltese leasing scheme

The Maltese leasing scheme does not reduce the VAT payable, but it allows it to be spread over time. As soon as the first instalment is paid, the yacht is treated as though she is VAT-paid. If she is later sold, the seller can either forgo the instalments already paid and sell her VAT-unpaid, or pay the remaining instalments and sell her VAT-paid.

3. Cruise under Temporary Admission

Temporary Admission allows private yachts with a non-EU flag, a non-EU owning company and non-EU beneficial ownership to cruise privately in EU waters for 18 months. The yacht must then leave EU waters and visit a non-EU port, after which she can return immediately, and the cycle can be repeated indefinitely. It is very common among non-EU owners. The main limitation is that the yacht must not be used by European friends and family unless the owner is on board, or at least in Europe.

Planning ahead

Options 2 and 3 both require the yacht to be bought in international waters. The choice of route therefore has to be made before the purchase completes. We advise on which option fits, set up the owning structure and organise delivery in the right location, working with tax advisers where appropriate.