Professional leisure yachts – VAT exemption for purchase/import
The Greek VAT legislation provides for a VAT exemption for the purchase/import of professional leisure yachts in Greece, provided of course that the specific conditions set out by the relevant VAT legislation (as well as by the applicable regulatory framework) are met.
In specific, according to article 27 par. 1 case (a) subcase (aa) of the Greek VAT Code (L. 2859/2000), a VAT exemption is provided for the supply (purchase) and import of vessels that are intended to be used for navigation on the high seas and which carry passengers for reward or which are used for the purpose of commercial, industrial or fishing activities.
The same legal provision also explicitly stipulates that the vessels falling under the abovementioned category must cumulatively meet the following conditions:
- they have been designed for navigation on the high seas, namely seagoing vessels having a hull of an overall external length of not less than 12 meters and which fall within the combined nomenclature (CN) codes 8901 10 10, 8901 20 10, 8901 30 10, 8901 90 10, 8902 00 10, 8903 91 10, 8903 92 10, 8904 00 91 και 8906 90 10 of the EU Common Customs Tariff (Regulation No 2658/87 – the tariff and statistical nomenclature and the Common Customs Tariff).
- they are used for carrying out activity mainly on the high seas.
Further to the above, certain Ministerial Circulars were issued in 2018 (which have been amended on certain points since their issuance) providing explicit clarifications as to the meaning of “carrying out activity mainly on the high seas”, the requirements that must be met as well as the procedure that must be followed for the evidencing and granting of the VAT exemptions.
In specific, Ministerial Circular POL 1177/2018 (as amended by several Ministerial Circulars/Decisions and currently in effect) stipulates the terms and conditions for the activity of vessels mainly on the high seas for the purpose of granting exemptions from VAT, whereas Ministerial Circular POL 1187/2018 (which is in essence the completion of Ministerial Circular POL 1177/2018) provides for the procedure that must be followed for the granting of the applicable VAT exemptions, including the means of demonstrating/evidencing that the requirement for activity mainly in the high seas is met.
It is to be noted that term “high seas” (or “open sea” as literary used in the provision) is defined as the sea area beyond 6 nautical miles from the natural coastline of the mainland or island country – the width of the coastal zone of Greece.
The Circulars set out a detailed procedure for the evidencing of the activity mainly on the high seas and the granting of the VAT exemptions, which include the electronic filing of certain Declarations for the intention to operate the vessel mainly on the high seas and for the confirmation of the actual operation of the vessel mainly on the high seas. However, given that certain electronic platforms, that should had been created in the electronic systems (Taxisnet) of the Greek tax authorities for this purpose, are not yet fully functional/realized, there are transitional provisions that simplify at the moment the process to be followed, the filings to be made and the supporting records/documentation to be kept for evidencing purposes.
Apart from the abovementioned conditions of the VAT legislation (which are provided above on a very high level) the VAT exemption is also indirectly linked with the requirement of compliance with the regulatory provisions of L. 4256/2014.
In this context, it is noted that a commercial leisure yacht must be duly and timely (within specific deadlines) registered with the “E-Registry for tourist boats and small boats” and to comply with the minimum charter days requirement (e.g. 75 days/3 years for crewed charter) in order for the granted VAT exemptions not to be forfeited.
Apart from the purpose of maintaining the VAT exemptions, the regulatory framework provides for a number of regulatory/compliance related obligations that must be met and procedures that must be followed.
* The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.