Complex and Fragmented VAT Regulations Disrupt the Future of Mediterranean Yachting

The Mediterranean has long been recognised as the world’s unmatched epicentre for yachting. However, an emerging threat now looms. Industry insiders warn that regulatory fragmentation is becoming a menace, pushing yacht traffic eastward. From Spain to Italy, non-EU owners are avoiding key markets due to cumbersome legal frameworks.

The Balearic Marine Cluster’s report highlights the need for greater alignment to sustain competitiveness. They expressed concern that a lack of legal coherence and more than 700 active VAT structures makes navigating the Mediterranean’s waters a daunting task. Panellists at The Balearic Superyacht Forum observed the Mediterranean region acting as a variety of micro-jurisdictions, each with an interpretation of ‘charter compliance’. This convolution, coupled with contradicting VAT regulations, is contributing to commercial risk and decreased investment.

Patricia Bullock emphasised the need to communicate that yachting is not a luxury, but a significant contributor to the economy and employment. Greece and Turkey have picked up on this and have strived to streamline their charter regimes. They have simplified licensing and extended concessions for marinas and operators to create an attractive environment for yachting. This resulted in the slow migration of yachting activity from the west to the east, driven not by climate or structures, but by simpler regulatory practices.

Conclusively, the yachting community must unite to advocate for clarity and unification of regulations. A combined effort could accelerate the elimination of the regulatory labyrinth, promoting a thriving yacht charter industry for the Mediterranean.