VAT Aspects of ownership
The VAT treatment of yachts is laid down in the EU 6th Directive which states any yacht entering EU waters is to either pay VAT in the member State in which the yacht first berths, or is to seek an exemption from paying such VAT, usually under some form of Temporary Importation (“TI”) procedure.
The consequences of not complying with European VAT can result in significant financial penalties for yacht owners and in extreme cases can lead to the seizure of the yacht.
An Isle of Man VAT registered business may enjoy the following benefits:
- Reclaim acquisition tax or import VAT
- Import to the Isle of Man without physically sailing to the Island
- Zero rated passenger transport
- Reclaim VAT on Isle of Man and UK expenses
Further benefits of registering in the Isle of Man:
- Low taxation and beneficial VAT treatment
- No annual tonnage tax
- No Insurance Premium Tax (IPT)
- No Inheritance tax or death duties
- No capital gains tax payable on the sale or transfer of your yacht
- No exchange controls