WE ARE METICULOUS
The Process
✓ Our side (let’s nominate it as “ABC”) acquires the yacht via a wholly-owned subsidiary with a loan from the Beneficial Owner (UBO)
✓ The subsidiary grants a first legal mortgage to the owner, as well as a charge over the shares of the subsidiary, as 100% security of the loan
✓ As a bareboat rental company ABC is entitled to reclaim the entire VAT rate due on the acquisition
✓ The subsidiary then rents the yacht back to a company owned by the now ex-owner on a bareboat basis for an initial period of five years
✓ The payable rental is determined in accordance with the estimated depreciation rate of the yacht
✓ The rental is being levied VAT on the rental at the full rate under the specific country’s “use & enjoyment rules” (20% in Monaco; 19% in Cyprus; 18% in Malta) while the yacht is in the EU, and at 0% when outside of the EU.
✓ Invoices for the rental plus VAT are issued every quarter, and once paid, the yacht carries those paid VAT receipts on board to show that VAT has been paid and that the yacht is in compliance with its obligations to pay VAT.
ILLUSTRATION FOR A €30MILLION YACHT
Monaco VAT Deferment Solution
€
Cost of yacht
30,000,000
Value in 5 years assuming 4% pa depreciation
24,000,000
Annual rent
1,200,000
VAT payable thereon at 20%
240,000
Set up costs – own SARL
50,000
Annual fees
60,000
Importation via Italy
10,000
All legal fees for both parties paid by the client
NOTE: VAT if paid in full at the mean EU rate of 20%
6,000,000
VAT is payable at the full rate of 20% when in the EU, and 0% when out. This is the maximum payable
Total costs year 1
360,000
Costs year 2
300,000
Costs year 3
300,000
Costs year 4
300,000
Costs year 5
300,000
Total costs over 5 years
1,560,000
VAT saving
4,440,000
WE HAVE THE SOLUTIONS
Have questions about VAT deferments for your super yacht? We’re happy to answer all of your queries!
WE HAVE THE SOLUTIONS
Have questions about VAT deferments for your super yacht? We’re happy to answer all of your queries!