yachtThe new Yacht Leasing scheme aims to individuals who are interested leasing a Yacht owned by a Cyprus Company. The issue of Circular 163 which describes the VAT treatment to be followed the effective VAT rate for Yacht registration can be as low as 4.42%.
Vat consideration is adjusted according to the size of the vessel and percentage of use with the European Union. Additionally the following conditions must be met:

• The lease agreement must be in effect between a Cyprus Company and any other natural or legal entity.
• The Yacht must sail in Cyprus waters within one month after the agreement has been signed.
• The Lessor must receive at least 40% of the yacht’s value during the initial payment.
• The lease payments must be allocated up to 48 installments and occur on a monthly basis.
• Profit from the lease is expected to be at least 10% of the yacht’s total value, in addition In the year the lease agreement initiates the total amount of lease payments on which VAT is calculated is increased by half of the calculated profit.

• The final payment cannot be less than 5% and attracts the standard VAT rate of 19%.
Finally, the relevant application must be communicate to the VAT authorities in order to acquire the relevant written approval from the VAT Commissioner.