Greek Charter - The Mechanics
Laws introduced in late 2017 in Greece effectively reduced the charter market to those guests who could start and finish their charter outside of Greek waters.
It was made clear that the additional cruising time required to reach Greece impacted on the region’s appeal, however, toward the end of the 2018 season the coordinates to get a Greek charter license were set.
That process varies depending on whether the vessel flies an EU or non-EU flag however in each case a Greek presence must be established both fiscally and physically by the yacht owner. A VAT number must also be obtained and a Greek representative and accountant have to be appointed to take responsibility for the charters and activity of the yacht owner in the Greek market.
We are helping commercially compliant charter vessels meet with Greek regulations, but a Greek Foreign Commercial Yacht Inspection Certificate (PEXEPA) must be obtained before charters can commence.
Operationally and in a similar manner to other EU jurisdictions, VAT will be charged on the charter fee that is being earned by the yacht. Depending on the proposed routes for the charter, the current rates could be starting at the 9.6% level, although higher rates for domestic Greek charters will apply.
One important point to note is that a level of private use by the beneficial owner may be possible in Greek waters, thus saving VAT on the charter costs. It is imperative that no funds change hands and all fuel and supplies must be duty and VAT paid, as penalties for abuse of the rules are severe. Good consideration must also be given to the impact ‘private’ use may have on EU status of the vessel itself and the broader operational structure.
Although the costs are relatively high and the application process can be quite a time consuming, 2018 saw several owners looking to take advantage of a relatively untapped charter market and interest is already high for 2019. We strongly invite anyone who wishes to charter in Greece next year (and the years to come) to make pro-active arrangements now and avoid the possibility for delayed charter bookings next Spring.
On the 1st of December a new legislation (L4504/2017) entered into force.
The most important issue, for the foreign flagged yachts, is that
- ALL Commercial yachts under an EU flag and
- ALL Commercial yachts of a non EU flag, subject they are more than 35m in length and of non wooden construction,
are eligible to issue a Greek charter license practically ending the cabotage Law
All other yachts, not in possession of a Greek Charter Licence, cannot embark OR disembark guests from Greek ports.
While other see the new Law as a barrier, we strive to believe that it is actually a great opportunity for superyachts, seeking to charter and/or refit in East Med, to choose a Greek marina base as their homeport.
The Owners / Managers, by choosing Greece as homeport, could benefit both from an increased demand for chartering in Greece and East Med vs a quite short and inelastic supply of superyachts as well as from a great supply of widely reliable refit slots and facilities in Athens area.
Here below we summarize to the 10 most important advantages for the commercial activity of yachts under a Greek charter license,
- Chartering in Greece is on a continuous increasing demand curve. With more than 1,000 islands, 16,000km of coastline and just 45 yachts above the 35m currently home porting in Greece, there is a great opportunity on those who will choose either the Greek charter license and Greece as their homeport. Greece is amongst the strongest developing yacht charter markets;
- There is no taxation related to the company’s charter income for the EU flagged yachts. Yachts are only liable to a yacht tonnage tax per year which is €70 for the first 10ogt and €1/gt thereafter;
- Subject to the fulfillment of the obligation to charter for a minimum number of days per year (currently 25/40 for crewed yachts – no restriction if the days are completed in Greece or abroad), the Owner(s) may use the yacht privately as much as they wish. During such private use though, there is no exception on VAT and supply of tax free fuel;
- Under a Greek charter license the yachts may embark and disembark from any Greek port;
- For yachts in international voyages, VAT on charters is discounted by 60% i.e. VAT 9.6%;
- For yachts in local voyages, within Greece only, VAT is discounted by 50% i.e VAT 12%;
- Under a Greek charter license the yachts need to complete formalities just at the embarking (starting) port releasing the obligation of formalities at every port as for other yachts;
- Compliance with the requirements of the MCA coding is not a prerequisite, for domestic commercial yachts, to register under the Greek flag. Thus, yachts not built under MCA coding may still find themselves eligible for commercial registration within Greek waters;
- Other benefits exist under circumstances e.g. transit fuel on charters, VAT free berthing contract, exceptions on VAT for yacht refit, supplies, provisions, etc.;
- In Athens area (Perama), there is a mile long seafront with maintenance and refit yards with good availability in refit slots which can undertake all jobs from the simplest inspections to a full rebuild project. The long tradition in ship repairs had established the Greek work force amongst the most skillful contractors in Med; and
- Finally, a happy crew. Living in Greece is easy and is known as a 4-season destination with its vast historical monuments, the world heritage sites and the beautiful country landscapes. Athens is a cosmopolitan capital city with thousands of choices and facilities as well as an international airport easily connecting with all major destinations. The countryside offers great opportunities for short weekend breaks and all outdoor activities (yes, even skiing is possible Dec – Apr with two mountains just within a couple hours drive from Athens).
These benefits do demand some measure of additional effort.
First, a professional and competent registered Agency in Greece must be engaged to represent the yacht and its interests. Then a series of bureaucratic procedures will need to be dealt with and some time to complete them all shall be allowed (currently approx a couple of months).
We can assist you in all stages from the issuance of the charter license and tax compliance to the complete set up of a branch office, budget controlling and full agency support while in Greece.