What is VAT on a yacht charter?

Short answer

VAT is a consumption tax that may apply to yacht charters depending on the jurisdiction, itinerary and applicable tax rules. The rate and treatment can vary significantly between destinations.

Answer

VAT stands for Value Added Tax. In yacht chartering, the applicable VAT treatment depends on where the charter takes place and the relevant local rules.

For example, European charter destinations can have different VAT rates and rules from one another, and the treatment can change depending on the itinerary and where the yacht operates.

VAT is separate from APA. APA covers variable charter expenses; VAT is a tax imposed under the applicable jurisdiction.

Analysis

Because tax rules can be complex and change over time, the VAT applicable to a particular charter should be confirmed for the actual yacht and itinerary rather than assumed from a generic destination guide.

Broker comment

A professional broker should identify the applicable tax treatment when preparing the charter quotation and contract.