Cyprus Yacht Leasing Scheme
Using our expertise, we can help you assess the VAT treatment of purchasing and leasing a yacht or sailing vessel.
The way a yacht is purchased and leased can affect its VAT treatment. Establishing a company in Cyprus may form part of an appropriate ownership and leasing structure, depending on the intended use of the vessel and the applicable VAT rules. Our team can help you assess the options before proceeding.
The VAT treatment of yacht leasing in Cyprus depends on the applicable rules and the vessel’s actual use within and outside EU waters.
Basis of the Yacht Lease arrangement
The yacht lease arrangement is agreed between the lessor and the lessee. Its VAT treatment depends on the terms of the agreement, the applicable VAT rules and supporting evidence of the vessel’s use. Payment terms and any option to purchase should be reviewed before entering into the agreement.
How we can help you reduce the VAT liability
Our VAT team will review your proposed arrangement and contact the Cyprus Tax Department for written clarification where required. We will help prepare the relevant yacht details, including its certification, survey, bill of sale and any other supporting documents requested.
Once the proposed structure and VAT treatment have been reviewed and you are happy to proceed, we can arrange the formation of your Cyprus company and ensure that its Memorandum and Articles of Association are appropriately drafted.
We will assist with the company’s VAT registration, where required, and prepare the yacht leasing agreement between the lessor and the lessee. We will also help compile and submit the relevant documents, including the lease agreement, surveyor’s valuation, bill of sale and other yacht documentation, as required by the Cyprus Tax Department.
Upon completion of the yacht leasing agreement, we will assist with the applicable VAT documentation and any confirmation available from the relevant authorities.
The lessee makes payments to the leasing company under the lease agreement. Any VAT savings depend on the applicable rules and the vessel’s actual use within and outside EU waters.
Our support includes:
- Contacting the VAT Authorities to confirm the applicable VAT treatment and obtain written clarification where required.
- Registering your Cyprus company.
- Ensuring that the Memorandum and Articles of Association are correctly drafted.
- Assisting with the company’s VAT registration, where required.
- Preparing the leasing agreement.
- Collecting and organising the necessary legal documents.
- Filing the relevant documentation with the VAT Authorities.
- Accounting for VAT and submitting VAT returns.
- Assisting with the applicable VAT documentation.
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