EU action on VAT on yachts
British Marine members may have seen the recent news articles on the European Commission’s infringement proceedings against Cyprus, Greece and Malta for not levying the correct amount of VAT (value added tax) on the provision of yachts.
Having been kick-started by the Paradise Papers, the EU Commission is looking seriously at the way some EU countries have been operating VAT on the purchase of yachts. This has resulted in these infringement proceedings being taken against Malta, Cyprus and Greece. These countries all provide officially-backed schemes or systems that enable a significantly reduced amount of VAT to be paid on the purchase of a yacht (usually through a lease-type mechanism), on the underlying basis that it is presumed that to some extent the use and enjoyment will be outside EU waters.
If the EU is successful in closing down these mechanisms, it could have quite serious impacts on the marine industry in Europe. There is the view that these schemes or systems provided unfair competition to the disadvantage of UK suppliers and distributors, with customers looking to purchase from Med-based operators. However, the full extent of these schemes is not yet known and British Marine will await the outcome of these proceedings with great interest. It will, of course, keep its members updated via the website and Latest News.
British Marine members can obtain expert guidance and advice on VAT through the benefit service offered by member company, PKF FRANCISCLARK. To find out more and make use of this valuable service, visit the British Marine website (you will need your login details to access this benefit).
This story is from British Marine.
