The yachting industry has faced a number of challenges over the last few years; the global economic downturn affected many and ever changing legislation and regulatory requirements surrounding yacht ownership and the physical use of yachts by their owners, has resulted in a need for advisors and service providers, such as Abacus, to find alternative tailored solutions for effective yacht ownership. Despite these on-going challenges the industry seems to be setting sail on smoother water once again.
Garry Crossan, Chief Executive Officer of Abacus Corporate Services Limited, represented the Abacus group of companies at this year’s show at Port Hercule in Monaco from 24-28 September, to promote the advantages of using reputable shipping jurisdictions such as the Isle of Man and Malta in addition to the Abacus group’s yacht ownership and leasing services.
Recently returning from what he believes to have been a successful and vibrant show this year, Mr Crossan speaks of the changes in attitudes that he witnessed among industry professionals at this year’s show and of the positive signs, indicative of the yacht industry becoming buoyant once again:
“The industry appeared to have some of its bounce back at this year’s Monaco Yacht Show. The prestigious event; the largest in the yachting industry’s calendar; was busier this year with an increase in exhibitors, guests and yachts on show. The atmosphere was energetic and it was great to hear plenty of discussions around new builds and refits; signs of encouragement that the industry is back on its path towards growth.
Mr Crossan continued, “The subject of VAT seems to prevail over most issues in the yachting industry; this year’s show was no different with regular discussions surrounding the registration for VAT in multiple jurisdictions, the importation of yachts into the EU, VAT on charter payments and solutions available for the reclaiming of VAT.
A hot topic at the show was the recently released guidelines for reduced VAT on short-term charters in Malta. In July this year, the Maltese VAT department published guidelines for the Malta VAT treatment of short-term yacht charters commencing in Malta. The guidelines provide for the possibility of Maltese VAT to be charged only on the portion of the short-term charter deemed to take place in EU waters; effectively this extends the VAT treatment to short-term yacht chartering, which has been applied to long-term charters for a number of years.
For VAT purposes, a short-term charter is the charter of a yacht, with or without crew, for a period of less than 90 days. That charter is deemed to take place in the country where the vessel is put at the disposal of the customer, in this case Malta. Subject to certain conditions being satisfied, under the new guidelines, Maltese VAT will only be levied on the part of the charter deemed to take place in EU territorial waters.”
These guidelines will inevitably assist Malta in its growing popularity as a respected shipping jurisdiction and it is hoped that it will attract more yacht owners to the jurisdiction for the purpose of ownership and registration. The new guidelines are yet another attribute of Malta and a reflection of the on-going efforts being made by the Maltese government to promote Malta’s place on the map as a reputable centre for yachting.
Such like efforts will also assist other shipping jurisdictions in their growth and success within the industry. Malta is currently the largest shipping register in the EU and 5th largest in the world, while the Isle of Man Ship Registry remains one of the world’s most highly regarded, last year completing over 15 million Gross Registered Tonnes, an 8% increase on 2011. As a leading provider of yacht ownership structures and leasing services, with offices in Malta and the Isle of Man, Abacus is ideally located to assist yacht owners and is able to provide them with simple, efficient and effective solutions that meet the economic and legislative requirements within the tax and Superyacht environment.