The Cypriot VAT Department has recently published guidelines on the VAT Treatment of yacht leasing schemes applicable to pleasure yachts, thereby allowing yacht owners to benefit from the most attractive VAT regime within the EU during the currency of the lease agreement, and, at the end of the leasing scheme when they exercise the option to acquire the craft, acquire an EU VAT paid certificate on the pleasure yacht.
Closely modeled around a similar VAT scheme in use in Malta, the Cyprus Yacht Registration Scheme, represents however, a marked improvement on the Maltese scheme. Not only does it allow for lower levels of VAT, as low as 3.4% compared to Malta’s 5.4%, but also softer lease repayments over a maximum of four (4) years in lieu of Malta’s three (3).
Furthermore, the benefits to the Cypriot yacht leasing scheme, may, through the use of Cyprus non-resident companies (which are afforded tax exempt status) - further reading below - be further extended to the lessor, thereby ensuring significant tax savings for both contractual parties to the yacht leasing agreement.
Shoham can assist your lawyers for the relevant customs clearance procedures and attendance in Limassol port.