How VAT commonly applies to a charter, and why no general answer is safe.
The general position
For charters within the European Union, VAT is broadly accounted for in the member state where the charter begins, at that state's rate. Beyond that general principle, treatment varies: states have applied different reliefs, different approaches to time spent outside EU waters, and different rules for commercially registered yachts. Those rules also change.
What drives the answer
The embarkation country, the itinerary, the yacht's flag and registration, whether she is commercially registered and operating under a charter licence, the owning structure, and the charterer's own position.
- Where the charter starts and ends
- The cruising itinerary and time outside EU waters
- Flag, registration and commercial status
- The owning company's VAT registration and obligations
- The particular member state's current practice
How it appears in a quotation
A proper charter proposal states the charter fee, the APA, and the applicable VAT or tax separately, so the charterer can see the total commitment before signature. VAT is not taken from the APA — the APA funds the running costs of your week.
Outside the European Union
Other regions apply their own taxes and charges, which can include local charter taxes, cruising permits and import duties. Caribbean, Middle Eastern and Asian charters each have their own regime and must be checked individually.
Our position
We state the tax position given to us by the central agent and the owning company for your specific charter, in writing, before commitment. We do not issue rulings, and where the position is material we ask you to take your own tax advice.
Questions
- Is VAT included in an advertised charter rate?
- Usually not. Published rates are conventionally quoted excluding VAT, APA and delivery, so always read the proposal.
- Is VAT charged on the APA?
- Treatment varies by jurisdiction and by expense. The written proposal for your charter should make it clear.
This guide is general information about how the yacht market conventionally works. It is not legal, tax, financial or insurance advice, and it does not describe the terms of any specific yacht. Qualified advisers should be engaged on anything material, and rates, prices, availability and access are confirmed in writing before anything is committed.