Isle of Man Yacht Registrations

It is a requirement of the EU that all yachts within its waters are either VAT paid or in the EU under the temporary importation scheme. VAT paid means that VAT has been accounted to an EU VAT authority either on the yachts acquisition or on its importation into the EU. If the yacht is VAT paid then it will need to carry evidence of this which will either be a copy of the invoice from when the yacht was acquired showing the VAT paid or it will have to carry a VAT paid certificate issued by an EU VAT authority.

As to whether VAT has to be physically paid will depend on a number of factors but the basis rule is that if the yacht is to be used for private purposes then VAT will be payable but if the yacht is to be used for charter purposes and the owning entity is VAT registered then it should be possible to reclaim any VAT paid or to have the acquisition/importation treated as VAT paid without having to pay over the VAT.

It is important to this type of business structure to have the owning company VAT registered and to become VAT registered it must satisfy the requirements of the relevant VAT authority that it is conducting a business activity with the intention to realise a profit. Once the owning and management structure have being properly established there are many benefits to being VAT registered and operating the yacht as a commercial venture and these include being able to obtain goods and services without any charge to VAT and being able to obtain duty free fuel.

It must be remembered that the business must be run and managed as a business because failure to do this could impact the VAT planning. To achieve this owners are looking to specialist yacht management companies who have the knowledge and resources necessary to successfully manage their yacht and the business.

A summary of the services that we can offer are as follows:

• Manage VAT registration and ongoing administration
• Manage flag state registration and compliance including crew compliance
• Manage crew payroll
• Manage and administer bank accounts and crew credit cards
• Maintenance of accounting and financial records
• Preparation of budgets, management reports and annual financial statements
• Assist crew in obtaining fuel, provisions etc
• Execute charter contracts and ensure funds are remitted on time
• Manage hull and crew insurances

With regard to fees these are tailored to a client’s needs and depend on the size of the yacht and the services required.