 | A few points on the existing legal status of the general charter activity in Greece and the alternatives to use a yacht as commercial within Greek waters under Greek or EU Flag... |
A) Commercial registration at the Greek Registry
Yachts owned by a Greek or EU owner/entity are eligible to register commercially at the Greek Registry of Shipping. The purchase of a Greek commercial yacht is VAT–exempt, i.e. a potential buyer does not pay VAT (currently at 19% in Greece) on the value of the yacht. In light of this VAT relief and the liberalisation of the charter and cruise operations, the Greek Registry has attracted many new yachts of all sizes during the last couple of years. The yacht maintains the VAT-exempt status (and may operate within and outside Europe subject to the local laws) for as long as she is registered commercially at the Greek Registry.
The procedure to register a yacht commercially however could be time consuming due to the Greek bureaucratic burden (although the procedure is similar to the British registry’s). In summary, the owner and/or his representative should file with the Ministry of Shipping the Certificate of Survey, the Greek Registry Compliance Certificate (the equivalent MCA Compliance Certificate), Customs Import Declaration (exempt VAT Certificate), proof of title and Radio Licence. These are also the documents filed with the registry and ministry when applying for the licence to use the yacht commercially.
With effect from 2003, the permission/licence to use a yacht commercially is renewed every 5 years. The prerequisite to renew and/or maintain the licence is submission of documentary evidence that proves that the yacht was engaged in charter for at least 200 days within the 5-year period (or 300 days if entitled to bareboat charter). It is possible to carry over “charter days” from the previous 5-year period, had the yacht completed more than 200 days of charter (or 300 if applicable). It should be noted that according to the new regulations, all Greek-flagged commercial yachts of up to 20 meters may now be bareboat chartered.
According to the new regime, the most important benefits accrued from registering a Greek-owned commercial yacht at the Greek Registry are as follows:
- All profits/income are taxed at 0%.
- Yacht is VAT-exempt.
- Discounted marina/mooring fees.
- Licence to charter is renewed every 5 years.
- All Greek- flagged yachts up to 20 meters may now be bareboat chartered.
- Fuel is purchased net of VAT/local taxes.
- VAT on charter fees is only 4,5% (payable by the charterers).
A Greek-flagged commercial yacht may be owned/operated by the already known legal entities as an EPE (limited liability company), a Societe Anonyme or the recently introduced Greek company called NEPA (Maritime Companies for Pleasure Yachts). NEPAs in light of the new regulations as a “single purpose vehicle” to own, manage or operate a yacht. All limited companies may be converted into NEPAs but not vice versa. Of course all Greek companies may be owned by other EU companies or persons (or non EU up to 49%) who must obtain a Greek A.F.M. number (except in the case of NEPA and S.A. when they don’t even have that obligation) and also appoint a Greek person as legal representative in Greece against tax port and/or other competent authorities.
NEPA (Maritime Companies for Pleasure Yachts)
The procedure for setting up a NEPA is straightforward . There are no formalities (unlike the other types of companies) and therefore setting up a NEPA is less expensive although it involves complicating accounting rules. The shareholders of NEPA could be of Greek or EU nationality and may also be appointed as the directors of the company (min. 3 directors). Minimum authorised share capital is 10,000 (or in any event equivalent to the value of the yacht) and the nominal value of each share is 1.00. A non-EU national may also be a shareholder of the company as long as he/she owns less than 50% of the total shareholding.
Operating a commercial yacht via a NEPA accrues significant tax and financial advantages. Two very important advantages are that there is no income tax payable on the profits/income of the company and the transfer of shares carries no tax liabilities.
The underlying objective of the new rules, inter alia, is to simplify all procedures/paperwork and bureaucratic formalities. Prior to the new regime all yachts had to submit details of departures and arrivals at every port of call. In pursuant with the new regulations, these details are now submitted only once, at the first port of arrival (or departure if the yacht is moored permanently in Greece).
ΕU Charter Yachts
A motor yacht under EU (non Greek) Flag is also entitled to execute chartering in Greek waters (meaning clients to depart and arrive both in Greek harbors) under the following provisions of the Greek Law :
1.- The yacht must be registered in the Greek Ship's Registry or in a Ship's Registry of any country of E.E.C.
2.- The yacht must have a license to execute chartering in Greek waters such license to be issued by the Greek Ministry of maritime Affaires.
3.- The owning company of the yacht to be a company incorporated in one country of E.E.C.
4.- If the owning company is not Greek but a European one, then the European company has to open a branch office in Greece as per article 50 of the Greek Law 2190. The branch office will obtain a local VAT number and will pay taxes to Greek Tax Office for all income to be born in Greece, as provided by the Greek Tax Law.
5.- All income deriving from the chartering of the Greek company is tax free completely, while the income of the branch office of the European company is taxable although it is possible to avoid payment of any Tax if the branch office declares an equal amount of annual income and expense or if the foreign country has a double tax treaty with Greece .
6.- If the yacht is under 650 G.T. crew and social security regulations of the Greek legislation apply whilst Flag’s regulations apply in case the yacht is over 650 G.T. although it is possible with a foreign Flag to have a Foreign (non Greek) crew.
Trusting to have enlighten your knowledge regarding the general yacht charter activity in Greece I remain at your disposal should you have any queries.
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