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Wednesday, December 10, 2008

Superyacht tax regulation: the VAT question...

Cross-border leasing scheme, "exotic" financing solution, offshore management company and charter activity are amongst the usual solutions provided to reclaim/avoid paying taxes like VAT.

Here is an interesting article published on regarding a recent European VAT fraud on yachts:

November 2008
"Under the joint direction of the Netherlands and French tax authorities and customs services, European tax investigators have discovered a multi-million euro VAT fraud concerning the construction and delivery of luxury yachts.

Approximately 300 owners of yachts and companies involved have settled unpaid tax bills to the tax authorities of 11 European Union (EU) member states.

The total value of the yachts investigated amounted to more than EUR1bn, with Dutch tax and customs levying EUR31m in additional tax assessments. A previous smaller-scale VAT probe undertaken by the Dutch and Belgian authorities in 2001 resulted in additional tax assessments of EUR10m.

Dutch State Secretary of Finance, Jan Kees de Jager, considers it important that these kinds of tax frauds are strictly investigated.

"Most people just pay their taxes properly. Then they expect that the tax authorities investigate people who do not do so. The Dutch Tax and Customs Administration has played a leading role and achieved good results with the investigation."

De Jager said that he would look into the possibility of further joint operations with EU tax authorities to prevent tax evasion.

The various tax authorities and customs services involved carried out 322 investigations into 225 transactions. In addition to the Netherlands and France, the joint initiative was assisted by ten other member states, including Belgium, Denmark, Germany, Ireland, Italy, Luxemburg, Malta, Spain, the United Kingdom and Portugal. In all, 150 people were involved in the probe.

The complete operating chain, from yacht builders, dealers and intermediaries, up to the end user, was closely scrutinised during the investigation.

The extent of the VAT fraud has surprised the government of the Netherlands, which has announced that an international network of tax specialists at the various EU tax agencies will be established to contribute to an ongoing investigation.
The Dutch government has also announced that the number of inspections in Dutch marinas will be increased and extra attention given to the purchase of yachts to ensure that VAT has been paid."

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