VAT On Greek Yacht Charters Increased From 1 June 2016

VAT On Greek Yacht Charters Increased From 1 June 2016

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VAT On Greek Yacht Charters Increased From 1 June 2016

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As of 1 June 2016, Greece introduced a 1% hike in VAT. This increase saw the standard rate of VAT go from 23% to 24%. The rise is expected to generate between €400m and €500m, and will help meet a gap in the 2017-18 budget forecast. It will also help avoid a potential VAT rise in domestic electricity, water and private education.

Financial analysts have warned that the VAT increase is likely to have a depressing effect on the Greek economy as it will negatively affect the nation’s core industry – tourism – amongst a myriad of other industries. The effects of the VAT increase could also have negative repercussions within Greece’s superyacht charter market.

Category I vessels chartering in Greece (that is vessels that have been granted permission to perform international cruises) are entitled to a 60% VAT discount. Therefore, the VAT rate applicable to these vessels will rise to 9.6% from the current 9.2%.

Category II vessels, which are permitted to perform long range cruises within Greek waters, benefit from a 50 per cent VAT discount; the rate for these vessels will now be 12% rather than 11.5%. Vessels chartering for a period of 48 hours or less are not entitled to any VAT discount and will be subject to the full 24% standard rate of VAT.

Statistics suggest that over 60 per cent of all Greek goods will be affected by the tax hike; affected goods include fuel, restaurants and most provisions, all in all leading to a costlier Greek charter or holiday experience. There are also fears that tax increases will further exacerbate Greece’s issue with tax evasion and avoidance, potentially driving the struggling nation into a progressively more recessionary position.

 

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Abacus is an independent and privately owned leading fiduciary and fund services group. As one of the longest established and reputable service providers on the Isle of Man, later expanding into Europe with the establishment of our Malta office, we have an established track record of more than 40 years of excellence in providing fiduciary and professional administration services. Our principles of applying integrity, independence and insight across our client’s requirements have gained us recognition as a leader in our field.

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