The Evolution of Yacht Charter
The yacht charter industry has been around for several decades now and in the early days, yacht chartering was a less formal and rigorous transaction than it is today.
Fast forward to 2018 and what we have now is a complex arrangement involving a myriad of various agents and requiring careful monitoring to avoid the numerous pitfalls.
Charter brokers, stakeholders, fiscal agents, technical agents, yacht managers and owners are required to navigate a myriad of complexities associated with yacht charter to operate correctly and avoid penalties, fines, taxes and possible detainment.
Maintaining fiscal registrations, obtaining charter licences, technical inspections, applying and charging the correct levels of VAT and duty, picking up and dropping off guests in the correct locations, adherence to local rules (e.g., French/Italian Commercial Exemption) are all examples of the elements that need to be carefully managed. Added to this is the requirement for some yachts to switch from private to commercial and vice versa which throws up another dimension of issues.
Having one party oversee all the various elements is imperative to avoid duplications or omissions, enabling the charter party to enjoy their time on board the yacht.
Most people are familiar with the MYBA charter contract which has become the go-to contract and the industry standard. It has evolved over the years to the latest electronic version downloadable for eligible MYBA members to use. With regular reviews from a legal and tax perspective, this contract provides a fair and balanced contract looking after both the yacht owner and the yacht charterer.
The stakeholder (usually the same as the central agent) is party to the charter contract and holds the charter fee and any applicable VAT until the charter commences. VAT is calculated in the jurisdiction where the yacht is put at the disposal of the charterer and can vary depending on the cruising itinerary of the yacht.
Sarnia Yachts has been providing both ownership and operational services to clients for over 50 years and is experienced in all aspects of both private and commercial operation.
Please note that this article is intended to provide a general overview of the matters to which it relates. It is not intended as professional advice and should not be relied upon as such. Any engagement in respect of our professional services is subject to our standard terms and conditions of business and the provision of all necessary due diligence. © Praxis 2023