CHARTER TERMS E AGREEMENTS
Once a suitable yacht has been selected, your charter broker then prepares a charter contract, a legally binding document. Most large yachts are chartered in the Mediterranean under a the Myba Charter Agreement put together by MYBA The Worldwide Yachting Association; this is the best yachtcharter Agreement, certified by the most powerful association in the world. A yacht which can be chartered under this contract is certified by the association and this a first warrantee itself.
The Myba Charter Agreement states very specific conditions called WMT (Western Mediterranean Terms). Charter rates paid by the Charterer include: yacht’s hire (fully equipped), crew, yacht’s insurance, crew’s food. Charter rates do not include: fuel for the yacht, for generators, for tenders and toys; guests’ food and drinks; port fees and taxes if any; water and electricity ashore; personal laundry, personal communication costs (including wi-fi) and everything not mentioned in “rates include”.
Additionally, if the plan calls for a Monaco-based yacht to pick up a charter party in Naples (for example), or vice versa, this will attract a repositioning charge to cover the cost of delivering the yacht to the desired pick-up point.
In East Mediterranean the usual terms are called SEMT o EMT (Standard Eastern Mediterranean Terms), usually applicable in Greece and Turkey. In this case rates include: yacht’s hire (fully equipped), crew, insurance, crew’s food, fuel for 4 or 5 hours per day, port fees and taxes if any (Corinth Canal fees are never included in rates). Often, but not always, rates also include water and electricity. Rates do not include: fuel for the yacht over 4 or 5 sailing hours per day, fuel for tenders, generator(s) and toys, private marina fees, guest’s food and drinks, communications costs and personal laundry.
Standard Caribbean Terms (SCT) are usually applicable in the Caribbean area and they state that charter rates include: yacht’s hire (fully equipped), crew, insurance, guests’ food, crew’s food, fuel for a number of hours often changing from a yacht to another. Drinks are extras together with personal communication costs, personal laundry, port fees.
ADVANCED PROVISIONING ALLOWANCE (A.P.A) AND CURRENT EXPENSES
The A.P.A. mentioned and well described in the Myba Charter Agreement (Clause 8) essentially creates a bank account for the Captain of the yacht to provision on your behalf and on your preferences basis. Key provisioning are fuel, food, drinks and port fees. Normally a percentage will be added on to the base charter fee – depending on the type of boat and therefore fuel consumption. For sailing yachts expect 20 to 25% to be added on and for motor yachts 30 to 35%. You will pay this with your final charter payment. The Captain is obligated to keep all receipts and balance the account for you, and you can check the expenditure level at any time during the charter.
At the end of the charter, the Captain will give you a full account of your expenditures, and any amounts not used will be refunded to you. There are no mark-ups on the APA – all of the funds go directly to buying fuel, food, etc. The APA is a simple and efficient way of getting the boat provisioned properly, with minimal hassle and straightforward record keeping.
VAT IN ITALY AND IN MEDITERRANEAN SEA
In Italy, from 2002, the law allows yachts for charter to apply reduced VAT. As many yachts for charter carry out their charter activity either in UE or in extra UE waters (Tunisia, Croatia, etc…), Italian Government decided that who charters a yacht and cruises UE and Extra UE waters can pay the usual VAT percentage on a part of the Charter Fee only. The VAT percentage applicable to each yacht for charter is inversely proportional to the yacht’s dimensions.
Hereinafter the VAT percentages applicable in case during the charter period the yacht cruises in International waters too:
– Motoryachts or Sailingyachts over 24 meters lenght 6,60%
– Sailingyachts between 20.01 and 24 mt lenght and Motoryachts between 16,01 and 24 mt lenght 8,80%
– Sailingyachts between 10,01 and 20 mt lenght and Motoryachts between 12,01 and 16 mt length 11%
All Italian yachts regularly licensed for charter can buy duty free fuel, cheaper than full price.
In other Mediterranean Countries, the applicable VAT percentages are different from Country to Country. Hereinafter some examples:
– Charters starting in French ports: 20% o 10% VAT depending on the itinerary
– Charters starting in Spanish ports: 21% VAT
– Charters starting in Greek ports: 12% VAT
– Charters starting in Turkish ports: 18% VAT
– Charters starting in Croatian ports: 21% VAT
– Charter starting in Montenegro ports are VAT exempt ***
VAT applicability and percentages are to be confirmed time after time cause exceptions can be endless
*** Montenegro is a VAT exempt Country as it is not part of European Community; so charters can be considered exempt from VAT. But in 2017 Croatian Government imposed to all yachts starting charters in Montenegro to pay Croatian VAT pro-rata for every single day spent cruising Croatian waters.
VAT is applicable depending on the port of delivery, where the charter commences. If, for example, the port of delivery is in Italy, then Italian VAT is applicable; if the charter starts in Croatia, Croatian VAT is applicable.
Our experienced brokers know European laws and the Myba Charter Agreement very well; they will guide and help you to clarify every detail of the contract and to fulfill the complete paperwork, making everything as simple and fast as possible.