A ministerial decision has led to new regulations being put in place which may limit the flexibility of yacht charters in Greece.
Last month, a decision was made by the Greek government stating that foreign-flagged yachts chartering in Greek waters will need to spend more than 50 percent of their distance travelled while chartering in the open seas in order to benefit from VAT exemptions.
This comes after a decision was put in place last year, stating that foreign-flagged yachts wishing to begin or end a charter in Greece would need to go through the arduous process of obtaining a Greek charter licence.
If these specifications are not met, yacht-owners will not be able to benefit from VAT exemptions on fuel, provisions and equipment while their yachts are chartering. If not adhered to, yachts could be subject to a VAT liability, arising on the value of the hull.
The clampdown may lead to yachts being deterred from chartering in the region, according to Jennifer Timinis, communications director of Greek yacht agency and management company Oceda.
“ ‘The open seas’ is defined as six nautical miles away from the coast,” explains Timinis, “but in Greece, there are so many islands, it’s very difficult to spend 50 percent of total charter distance travelled in open seas.”
“At the moment, it doesn't look like simply entering open seas will suffice to comply with regulations." She continues. "Yachts have to literally spend 50 percent of cruising time in those waters."
Under the new regulations, all owners wishing to benefit from VAT exemptions will have to use AIS to keep full records of all charter movements. They can then be inspected by authorities to ensure their yachts are complying with the rule.
"There are still too many grey areas to be able to give clear advice and we are still awaiting more input from the government on how such regulations will actually apply.” Says Timinis.
The decision was made by the Greek government, which has been under pressure by the EU to limit tax exemptions on vessels which are available to charter. “The EU has pushed for this, but I don’t think our government did a good job at fighting it." says Timinis.
"I think they probably saw it as a good opportunity to cash in from the yachting industry, which unfortunately is dreadfully short-sighted."
As seasoned charterers will know, the Greek charter market has always operated differently compared with the rest of Europe. Regulations in France, Italy, Spain and Croatia are more flexible, and involve a simple VAT registration for foreign-flagged yachts chartering in their waters. "Each EU country is more or less on the same page except for Greece,” confirms Timinis.
In Greece, there are so many islands, it’s very difficult to spend 50 percent of total charter distance travelled in open seas.
“It’s almost as if the [Greek] people advising the government aren’t really part of the industry, they don’t understand how the rest of Europe works. If they did, we would just mirror their procedures, with clear-cut rules in place which would allow the local market to flourish." Says Timinis.
“The current system in place is so complicated that as a result, foreign-flagged boats do not bother with the Greek charter licence and simply start and end charters outside of Greece, meaning the country misses out completely on that VAT - let alone fuel, provisions and other supplies which would normally be delivered at the start of a charter. "
It will take some time before grey areas are clarified and the regulations are put in effect. Until that time, Timinis says we can expect some intense lobbying from yacht-owners and the local market.
“It’s a shame because Greece has 6,000 islands and islets in total, so you have unrivalled cruising diversity. You have Mykonos and Santorni if you want to do the whole shops, clubs, restaurants, bars thing, and then you have the milder, but still lively, islands to choose from - and then you have the more remote islands, with stunning scenery and secluded bays. Green islands, barren islands, whitewashed islands, - you have everything.” Says Timinis.
YachtCharterFleet will be sure to keep you updated with more news as this story progresses.
In order to find out more about chartering a yacht in Greece, please get in touch with your preferred charter broker.
Alternatively, view all superyachts for charter in Greece.