European VAT regulations:
when do they apply?

In accordance with European regulations, “short-term” time charter agreements (up to 90 days) are subject to the European VAT rules if the following “territorial condition” is met, irrespective of the yacht flag or the yacht owner’s tax residence:

  • Port of embarkation in a European Country (the charter is relevant for VAT purposes in the Country where the port of embarkation is).
  • Port of embarkation outside the EU but the yacht is sailing in European waters (the charter meets the European territorial VAT condition and the owner has to comply with VAT requirements of the European Countries where the yacht actually sails).