/U.S.-Built Yachts Chartering in Europe: Update on 25% Tariff

U.S.-Built Yachts Chartering in Europe: Update on 25% Tariff

By Diane M. Byrne on 03.27.19Since news began circulating that U.S.-built charter yachts are subject to a retaliatory tariff in Europe, more questions than answers have arisen. Several industry organizations such as the European Committee for Professional Yachting (ECPY) have reached out to customs authorities for clarification. Just yesterday, ECPY received new details “that have fundamentally changed the system of commercial use,” it reports.
First, to clarify, private yachts in private use are exempt from the tariff. Only U.S.-built yachts chartering in EU waters face an additional 25-percent customs fee. Specifically, the fee is on the value of the hull. It’s a response to the United States additionally taxing imported steel by 10 percent and aluminum by 25 percent. ECPY has been negotiating with the French Customs Service regarding the tariff, since most charter yachts use French ports as their summer base.
ECPY reports the following new details:
1. U.S.-built yachts that chartered in the EU prior to June 22, 2018 are exempt from the 25-percent duty. That date is when the new regulation went into effect (even though, apparently, enforcement did not take place right away). However, “a yacht that has never been imported will therefore not be eligible for exemption from additional customs duties,” according to ECPY.
2. Private yachts under “temporary admission for private use” status can charter. Though, there are caveats. Your flag state must permit it, plus you must appoint a fiscal representative and pay VAT on the charter fees, as usual. In addition, this eliminates the benefit of operating under the Yachts Engaged in Trade (YET) program. Finally, ECPY is still awaiting clarification as to whether European passengers can board the yacht while in European waters.
3. Charter is no longer considered commercial activity. Instead, yachts will receive “temporary admission for commercial use” status. Furthermore, “they have to stay outside European waters and can only enter European waters for the duration of the charter, and must leave immediately at the end of the charter,” ECPY states.
4. Commercially registered yachts wishing to use a transport contract need “temporary commercial admission” status for that contract period. In addition, they must depart EU waters at the contract’s conclusion, “or be placed under another customs procedure,” ECPY says. All yachts using transport contracts can welcome European as well as non-European clients aboard while in European waters, too.
5. Tenders can be exempt, too. Chase boats and tenders with their own registration require the same temporary-admission status as your primary yacht. The ‘temporary admission’ status of your yacht covers tenders without their own registration and that are on your yacht’s equipment.
ECPY says additional issues are awaiting customs’ clarification. It plans to release yet another update as soon as it receives details.
European Committee for Professional Yachting ecpy.org

Related

Source link