Cayman Islands (YET) in Italy

According to Shipping Notice 03/2017 released on 19st December 2017 by the Maritime Authority of the Cayman Islands, pleasure yachts registered in the Cayman Islands are now finally allowed to obtain Yacht Engaged in Trade Certification (YET). This certification includes a Yacht Engaged in Trade Certificate of Compliance (YET COC) and temporary Certificate(s) of British Registry for a Yacht Engaged in Trade (temp COBR YET) enabling the yacht to charter up to 84 days per calendar year in European (EU) waters. Please find hereby a quick summary of what the YET programme is:

A YET can be defined as a yacht of 24 metres or more in load line length, holding a valid Certificate of Class, which is voluntary compliant with all applicable commercial standards and regulations; which has obtained and maintains a Yacht Engaged in Trade Certificate of Compliance, allowing the yacht to obtain temporary Certificate(s) for a Yacht Engaged in Trade, and therefore to engaging in up to 84 days of charter per calendar year with no more than 12 passengers.

The main benefit of the program is flexibility; owners do not have to choose anymore between purely private or commercial registration. Owners can now use their yacht privately whilst being able to offset some of the running costs by offering their yacht for charter. Unlike commercially registered vessels, owners need not sign a charter agreement nor pay VAT on their own use. Unlike yachts operating under the switching regime, there is no need as well for switching between pleasure and commercial registration every time yachts change their mode of operation and use, nor to proceed with export/import formalities, leave the EU and visit a third country port each time yachts switch between pleasure and commercial use.

To be eligible to register as YETs, a yacht must either be in possession of a Value Added Tax [VAT] paid certificate or other document proving that the yacht has a VAT paid status; or operate in EU waters under the Temporary Admission [TA] regime in accordance with EU regulations meaning the yacht can enter and stay in EU waters for a period of up to 18 months without being liable to pay VAT on the hull. This second option is only available for yachts ultimately owned by non-EU residents and owned by non-EU Companies.

Pleasure yachts in possession of a valid Yacht Engaged in Trade Certificate of Compliance (YET COC) should expect to be inspected and audited as commercial yachts. Furthermore, private yachts operating under temporary Certificate(s) for a Yacht Engaged in Trade (and not only under private certificate of registration) shall be subject to inspection and control measures under the Paris Memorandum of Understanding.
For the time being pleasure yachts which are operating under a temporary YET certificate can only start their charters in Monaco, France and in Italy under certain conditions.


Please find below a quick summary of the most important points about YET:


PURPOSE

The purpose of this Shipping Notice is to define the procedure to be followed for a Pleasure yacht registered in the Cayman Islands to obtain Yacht Engaged in Trade certification.


APPLICABILITY

This Shipping Notice is applicable to all Cayman Islands registered pleasure yachts that seek to charter in EU waters, which have a VAT paid status or operate under Temporary Admission regime in EU waters.

This Shipping Notice also sets out the technical requirements necessary to qualify as a Yacht Engage in Trade.


CAYMAN ISLANDS – MEANS OF REGISTRATION

At the present, the Cayman Island Shipping Registry offer yachts two means of registration:

  1. full registration ‘pleasure’ and
  2. full registration ‘commercial’

The Yacht Engaged in Trade (YET) program has been developed as a new dual use operation program to offer a third means of registration for commercially compliant yachts. This is to allow owners the flexibility they require to operate their yacht privately with the option to charter their yacht for up to 84 days per year while taking into account EU VAT and Port State Control requirements.

Yachts meeting the requirements of this Shipping Notice will be issued with:

  • a Cayman Islands Yacht Engaged in Trade Certificate of Compliance (YET COC) and
  • temporary Certificate(s) of British Registry for a Yacht Engaged in Trade (temp COBR YET) covering the charter periods or periods of commercial promotion. These certificates authorize yachts to charter for up to 84 days per calendar year in European (EU) waters.

Yachts wishing to engage in trade activities are required to be in compliance with:

  1. the Merchant Shipping (Vessels in Commercial Use for Sport & Pleasure) Regulations, 2002;
  2. the applicable sections of the Large Yacht Code;
  3. this Shipping Notice; and
  4. all other applicable and international requirements.

ADVANTAGES APPLICABLE TO YACHTS ENGAGED IN TRADE (YET)

  1. Ultimate Beneficial Owners can privately use their yacht without losing the option to charter the yacht on an occasional basis to offset the annual running costs
  2. Eliminates the need for switching between pleasure and commercial registration every time the yacht is to change its mode of operation and use
  3. Eliminates the need to proceed to export/import formalities and the need to leave the EU and visit a third country post each time the yacht is to switch between pleasure and commercial use
  4. Ultimate Beneficial Owners do not need to sign a charter agreement when using their own yacht on a private basis
  5. Ultimate Beneficial Owners do not need to pay VAT on their own use
  6. No risk of substantial penalties for extensive pleasure use
  7. VAT Exemption is available on works for non-VAT paid yachts (inward processing relief regime)
  8. The 18-month Temporary Admission allowance period is paused each time the yacht is used as a Yacht Engaged in Trade (YET) and placed under Temporary Admission for Commercial Activity (TACA YET)

ELIGIBILITY FOR A YACHT ENGAGED IN TRADE (YET)

  1. The yacht must be 24 metres or more in length
  2. The yacht must be in possession of a Cayman Islands Pleasure Certificate of British Registry (Pleasure COBR)
  3. The yacht must successfully undergo an initial Compliance Verification survey in accordance with section 6 of this Shipping Notice
  4. The yacht must comply fully with the requirements of the relevant chapters of the Large Yacht Code
  5. The yacht must be classed by a Classification Society recognised by the Administration
  6. The yacht must operate in full commercial compliance at all times, whether engaged in trade or not; including full commercial compliance with all applicable national requirements and international Conventions’
  7. Yachts with a gross tonnage of less than 500, shall implement a Safety Management System as per the requirements of the Large Yacht Code. There is no requirement for a yacht under 500 gross tonnage to engage the services of a shore based company or Designated Person Ashore.
  8. The yacht must have a documented planned maintenance system for all identified critical equipment
  9. The yacht must hold a valid International Load Line Certificate issued in accordance with the Large Yacht Code for at least a short-range yacht
  10. The yacht must be issued with a Cayman Islands Yacht Engaged in Trade Certificate of Compliance (YET COC) and temporary Certificate(s) of British Registry for a Yacht Engaged in Trade (temp COBR YET) covering the charter periods or periods of commercial promotion

LIMITATIONS APPLICABLE TO YACHTS ENGANGED IN TRADE (YET)

  1. Whilst engaged in trade and operating under a temporary Certificate of British Registry as a Yacht Engaged in Trade (temp COBR YET), yachts are subject to any operational limitation included in the Yacht Engaged in Trade Certificate of Compliance (YET COC)
  2. Commercial operations / charters are limited to a maximum of 84 days per calendar year
  3. A maximum of 12 passengers may be carried
  4. Charters are currently limited to Monaco and French waters
  5. Owner’s pleasure use is not allowed during the period of validity of the temporary Certificate(s) of British Registry for a Yacht Engaged in Trade (temp COBR YET)
  6. A signed Master’s Limited Trade Declaration for a Yacht Engaged in Trade (YET) shall be made and retained for inspection on board
  7. Yachts certified as Yachts Engaged in Trade are not entitled to apply for any VAT exemptions on fuel or supplies

APPLICATION PROCEDURE FOR YACHT ENGAGED IN TRADE (YET) CERTIFICATION

  1. The registered owner of the yacht must submit registration application form and complete the applicable ‘Yacht Engaged in Trade’ (YET) declaration in section 5 of the registered form
  2. The yacht owner, manager or representative shall submit all applicable documentation to the Administration for Pre-Registration Vetting
  3. If not already in possession of a Large Yacht Code Compliance Certificate, the yacht must successfully undergo an initial Compliance Verification survey in accordance with section 7 of this Shipping Notice upon which a Yacht Engaged in Trade Certificate of Compliance (YET COC) shall be issued
  4. The yacht owner shall arrange for EU customs formalities to be addressed by the Customs Broker in the name of the Importer/Exporter
  5. The yacht must either:
  • Be in possession of a Value Added Tax (VAT) paid certificate or other document proving that the yacht has a VAT paid status; or
  • Operate in EU waters under the Temporary Admission (TA) regime in accordance with EU regulations which allows the yacht to enter and stay in EU waters for a period of up to 18 months without being liable to pay VAT on the full. This option is only available to yachts ultimately owned by non-EU residents and owned by non-EU Companies.

Note: a Customs Broker is only required to carry out customs formalities on behalf of the Importer/Exporter for yachts operating under Temporary Admission (TA).

The procedure includes:

  • The yacht being placed under Temporary Admission (TA) followed by Temporary Admission for Commercial Activity for a Yacht Engaged in Trade (TACA YET);
  • Issuance of the relevant oral declaration for the placement of the yacht under Temporary Admission (TA);
  • Issuance of the relevant import/export forms to provide clearance in and out for the yacht from the Temporary Admission for Commercial Activity for a Yacht Engaged in Trade (TACA YET) regime, during the period trade activities are undertaken.
  1. At the end of the charter or period of commercial promotion, the Importer/Exporter shall remove the yacht from the Temporary Admission for Commercial Activity for a Yacht Engaged in Trade (TACA YET) regime.

Part of the hereby provided info has been provided by other site. More info will follow soon. Please stay tuned and always email to info@yachtwelfare.it to know more about new laws and rules applying in the Med.


Download CISR Shipping Notice 03/2017

Up to Date Rules in Croatia

After the VAT workshop conducted during MYBA 2017 by our staff and partners please find hereby a summary of the new rules about Croatia:

1. Charter business can be performed by NON EU and EU charter companies with commercially registered yachts

2. To set up a yacht for charter business in Croatia (approx. 10 – 14 days), a charter company needs:

a) To obtain VAT and PIN numbers with the Croatian tax office. The list of required papers that must be submitted depends on if the charter company is from the EU or outside the EU.

b) To list the yacht in “E-crew” ( a central online database ) of the Croatian Ministry of Maritime Affairs. The list of documents to submit depends on the GT and LOA of the yacht.

If all the papers are in order there will no longer be a need for a technical inspection of the yacht’s firefighting and safety equipment in Croatia before the beginning of its 1st charter.

3. All non-EU flagged commercial yachts will be required to obtain a charter license. There is no longer a limit on the yacht’s length in order to perform charters in Croatia. The license will be valid for the calendar year. The number of licenses issued might be limited based on the Croatian market supply situation.

4. VAT will be charged on all commercial yachts that start charters (embark guests) in 3rd countries, on a pro-rata basis, for the time spent in Croatia. For instance, if a yacht embarks guests in Montenegro and comes to Croatia for 6 days, charter guests will need to pay Croatian VAT on those 6 days.

5. All charter contracts with an embarkation port outside of the EU, and a disembarkation port inCroatia, and which are signed before the 1st of May, will be exempt from VAT charges on a pro-rata basis for the time the yacht will spend in Croatia.

6. VAT for charter activities with overnight stay is 13%. Daily charters are 25%

7. All commercial yachts need to have proof of their VAT status in the EU when entering Croatia

8. When embarking guests outside the EU, all commercial yachts need to have a charter contract when entering Croatia; and when leaving Croatia they need to have an invoice of payment of Croatian VAT issued by its local VAT representative

9. When embarking guests in another EU country, all commercial yachts need to possess a charter contract when entering Croatia and a pro-forma invoice for VAT payment in that country issued by a fiscal representative in that country

10. When embarking guests outside the EU, EU charter companies can use their own VAT number for VAT payment in Croatia on a pro-rata basis

11. Non Eu commercial yachts who do not possess a cabotage license can cruise in Croatian territorial waters only between international ports, to and from shipyards, and only with crew on board

Some details are still being clarified by the Ministry regarding how certain points above will be processed and controlled, so get in touch with us if you plan to charter this year in Croatia.
Setting up a charter business in Croatia is a pretty simple, straightforward and quick process if you have a quality, professional representative.
For more info please download the below pdf file from our partner MYS and feel always free to contact us to info@yachtwelfare.it to get your dedicated estimate on costs.


VAT Guide by MYS Croatia

New French Social Security Laws

The French government has recently enacted a decree that states a new requirement for social security payments for all non-French seafarers (crew) based in France unless they are already paying for social security (national insurance) in another EU member state, or in any other national state that has an existing bilateral social security treaty with France.
This decree will come into force on 1st July 2017 and will apply to all seafarers resident or otherwise domiciled in France irrespective of whether their vessel (yacht) is private or commercially operated.

Please find links below to download an initial summary of the key points of the new French social security legislation, and two flow charts to help clarify the regulation. This information was prepared and released by Lesia Employment Services ICC Limited (Lesia) in conjunction with a major maritime law firm.

Lesia Summary on Social Charges
Employers’ social security obligations in Franceregarding crew members
Social security obligations of seafarers living in France and notworking on a French flagged vessel

Thanks to www.pya.org

2017 Rules in Croatia

Please find below a detailed update for 2017 released by our Croatian partner:

Part of our business is keeping up with the ever changing maritime laws and regulations in the region. So with the possibility of some important changes to charter tax potentially being instated this year, we’ve been keen to inform everyone in the industry. We were going to wait until the changes took effect before sending out this update, but after hearing conflicting information from many other people in the industry outside of the country, we decided to send it out early. It covers the main VAT regulations and charter activities in Croatia that are set to change this year. Of course, we will continue to release pertinent information as we learn more from the relevant authorities. The following are the changes we have been informed of that should come into force for the upcoming 2017 season.
VAT and Charter Regulation Changes for 2017:

1. VAT will be charged to all commercial yachts that start charters (embark guests) in 3rd countries, proportionate to the time spent in Croatia. For instance, if a yacht embarks guests in Montenegro and comes to Croatia for 6 days, charter guests will need to pay Croatian VAT for 6 days.
2. All non-EU flagged commercial yachts will be allowed to perform charters in Croatia, but will be required to obtain a charter license. There is no longer a limit on the yacht’s length in order to perform charters in Croatia. The license will be valid for the calendar year. The number of licenses issued might be limited based on the Croatian market supply situation. Please note from the above info, ALL non-EU flagged commercial yachts will be able to start charters in Croatia if they obtain a charter license and have a charter and VAT representative!
3. Commercial yacht owners and owning companies are allowed to perform charters in Croatia, either through charter companies / ship agents or if they open their own charter company in Croatia.
4. Commercial yacht owners and owning companies from the EU are NOT obliged to have a VAT and fiscal representative in Croatia, while yacht owning companies from non-EU countries ARE obliged to have a VAT and fiscal representative in Croatia.
5. Private yachts will still be able to embark and disembark their guests in Croatia regardless of flag. In cases where the owner and family members are not onboard, the Captain will have to have an authorized list of people with: 1) names of guests and, 2) length of time that these guests will spend on the yacht. This list of people will have to be authorized by the Captain’s signature and the yacht’s stamp.
6. VAT for charter activities in Croatia is still 13% for weekly charters and 25% for daily charters.

As soon as the administration finalizes and publishes the relevant information under points 1 and 2 above, we will inform you immediately. Meanwhile, if you have any questions, please do not hesitate to contact us at any time
Advice: if you are coming to Croatia this season and plan on having a busy charter season, you should start preparing NOW.
Thank you for your time and attention. All the best and we look forward to hearing from you soon.