Briefings

European Commission increases the pressure on the yachting industry, March 2018

The yachting industry has long anticipated the day when the European Commission would increase the pressure on those EU member states offering yacht owners a means of mitigating their VAT exposure. That day came on 8 March 2018, with the announcement by the European Commission of infringement proceedings against Malta, Cyprus and Greece.

For more details of such proceedings, please see http://europa.eu/rapid/press-release_IP-18-1451_en.htm.

Whilst these proceedings will almost certainly be resisted by the member states affected, it is unclear what effect it will have on such schemes in the future. It is our expectation that any yacht engaged in a Maltese or Cypriot leasing scheme on the date of the Commission's announcement is likely to be allowed to remain in its scheme and secure a VAT paid status upon the expiry of its lease. However, until we know more, we would recommend caution when considering entering a yacht into one of these schemes.

If you have any questions or concerns regarding such matters, please contact any member of the HFW Yacht team and we will be happy to discuss the matter further.

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Elinor Dautlich
Partner, London
T +44 (0)20 7264 8493
E elinor.dautlich@hfw.com

William Maclachlan
Senior Associate, London
T +44 (0)20 7264 8007
E william.maclachlan@hfw.com