Yacht Charter VAT Guide

Most professional yacht charters carry VAT or a local charter tax. Which tax applies, and how much, usually depends on a sequence of factors rather than one rule.

The written charter quotation sets out the tax that applies to your charter. This guide explains the principles so you can understand that quote; it is educational and not tax advice.

A common mistake is to assume the yacht's flag decides the VAT. It does not, on its own. Nor does where the contract is signed, where the broker is based, where you live or where the owner lives. These can matter in specific cases, but none of them is the starting point.

Under the EU VAT framework, the hire of a means of transport is treated differently depending on duration. For vessels, a short-term hire is generally one of continuous possession or use not exceeding 90 days.

For a short-term charter, the place of supply is generally where the yacht is actually put at the disposal of the charterer. For longer hires, different rules apply, often linked to the customer's status and location. Your adviser and the written quote confirm which applies.

It means the place where you physically take control of the yacht for the charter, which in practice is usually where you embark. It is a factual question, not a choice made on paper.

These details may appear in the contract and can matter for licensing or invoicing, but they do not by themselves determine where charter VAT is due.

Where you board usually matters most for a short-term charter. Where you leave the yacht can affect logistics, delivery fees and, in some regimes, the tax analysis. A destination page describing where yachts cruise is not the same thing as a tax decision.

An itinerary crossing several countries does not automatically split the VAT between them. Some jurisdictions take actual use outside their waters into account; others do not. The approach depends on the rules where the charter starts and on the evidence the yacht keeps.

Time spent outside EU territorial waters may be relevant under some national rules, but only where those rules allow it and only with proper evidence. There is no generic 50% reduction available to every charter.

Country rules change, and each one has its own conditions, evidence and paperwork. Lund only publishes a rate when it has an official source and a date it was checked. Until then, the rate is confirmed in your written charter quote.

France applies its own rules to charters starting in French ports. Use outside EU waters may be taken into account under current French rules when supported by evidence. Older flat-rate reductions should not be assumed to apply.

Monaco is not a tax-free charter base. For VAT purposes, Monaco is closely linked to the French system, so a charter starting in Monaco is generally analysed with French rules in mind. Charters from Monaco into French waters, including Grand Prix weeks, need the same care.

Italy has its own charter VAT rules for charters starting in Italian ports, which have changed over time. Your quote should reflect the current Italian treatment for your dates and itinerary.

Greece applies VAT to charters and may also have other charges, such as cruising or environmental fees, depending on the yacht and itinerary. These are confirmed per quote.

Croatia and Spain each apply their own VAT and local requirements, which can include tourist taxes, licences or registration conditions for commercial yachts. Confirm these with the central agent and quote.

Other EU countries apply their own rates and conditions. The same principles apply: duration, where you board, the rules there and evidence.

Outside the EU, VAT or sales tax depends entirely on local law. Caribbean jurisdictions, the Bahamas, the USA, the UAE, Turkey and the UK each have their own regimes and licensing requirements. Lund explains these per enquiry rather than publishing general rates.

A charter starting outside the EU and entering EU waters, or the reverse, can raise both VAT and customs questions for the yacht. The ownership-side customs questions are covered in the general Yacht VAT guide.

Where rules depend on actual use, the yacht may need logbooks, captain records and positional data such as AIS. These are operational records kept privately; they are not published and Lund does not expose client itineraries.

Extending a charter or signing back-to-back contracts can change how the duration test applies. Successive contracts may be looked at together. Tell your broker early if you might extend.

Booking through a company does not automatically mean VAT can be reclaimed. Recovery depends on the company's own VAT position and the purpose of the charter, which is a matter for the company's accountant.

Before tax is considered, the yacht must be legally able to charter where you want to go, with the right commercial status, licences and permissions. A low tax figure on a yacht that cannot legally charter there is not a real option.

VAT or charter tax is usually calculated on the base charter fee. The quote should show the fee, the tax treatment and the tax amount separately.

APA is an advance for charter expenses, not a pool for paying tax. Expenses paid from APA, such as fuel, provisions and berths, may already include local VAT when purchased. Whether VAT applies to the APA itself depends on the jurisdiction and contract.

Fuel, food, drinks and berths bought during the charter usually carry local taxes at the point of purchase. Delivery and redelivery fees may be taxed under the charter's rules or separately, depending on the contract.

Event weeks can include berths, hospitality and packages invoiced separately from the charter, sometimes by different suppliers with different tax treatment. Each element should be listed in the quote.

Broker commission is normally paid from the charter fee and is not an extra line on the client quote. Gratuity is discretionary and outside VAT discussions. Private aviation, helicopters and concierge services are invoiced separately under their own rules.

Your quote should state the charter fee, the tax treatment, the rate where applicable, the tax amount and the APA as separate items. The invoice should match. If something is unclear, ask before signing.

Charter contracts, often based on MYBA terms, usually include a clause allowing tax to be adjusted if the law changes before the charter. Cancellations and deposits can have their own tax consequences. A contract is not a tax ruling.

Lund will not design charters to avoid VAT. Choosing where to board for genuine reasons is normal; staging artificial loops into international waters or paper arrangements without substance is not. Rules require real facts and proper evidence.

Lund never publishes bank details and never takes payment through a guide page. If you receive changed payment instructions, confirm by a known phone number before sending money.

Enter the charter fee and, only if your written quote states one, the tax rate. The checklist does simple arithmetic so you can check the quote. It never suggests a rate and is not tax advice.

Confirm every tax point with the written charter quotation and, where needed, a maritime tax adviser or your company's accountant.