The Isle of Man has one of the world’s leading shipping and yacht registries and can offer favourable VAT treatment and a low tax regime from which to do business.
The Isle of Man – Commercial Charter
Notwithstanding that a yacht may not be registered in the island, a yacht owned by a company registered for VAT in the Isle of Man can benefit from the island’s VAT arrangements. A company may claim back the VAT on its purchase or importation provided that the yacht in question will be used to provide commercial charter services. In addition, Charter income is subject to tax at a rate of 0% in the Isle of Man.
Customs and Excise in the Isle of Man will only register yacht charter businesses for VAT that are clearly established on a commercial basis. The business must seek to make a return on its investment. Customs and Excise also require evidence that a yacht is being made available, and actively marketed for charter, by individuals in addition to the beneficial owner. The administration and management of a yacht owning entity must take place in the Isle of Man.
Purchase of a Yacht
A key advantage of the use of an Isle of Man structure is that VAT can be accounted for and then reclaimed on the purchase of a yacht, with no actual movement of monies taking place. However, it is necessary for the yacht to sail to the Isle of Man for inspection by Customs & Excise staff.
Care is needed and advice should be sought depending on whether a yacht is purchased while outside the EU and requires importation into the EU or is purchased in the EU from a supplier established in the EU.
An Isle of Man Company can also be used when importing a yacht in a foreign location.
The Supply of a Yacht and VAT
If a yacht can carry ten or more passengers including crew, it may be possible to classify the supply of a yacht for VAT purposes as ‘passenger transport’.
Supplies of ‘passenger transport’ made in the Isle of Man or the UK are charged at a zero rate of VAT. The provision of chartering services in EU member states may be subject to local VAT regulations where the charter takes place.
The Isle of Man Registry is a Category One British Registry, and can therefore maintain international safety convention status for vessels of all sizes and classes. As a British ship, an Isle of Man flagged vessel is entitled to protection and assistance from the British Royal Navy and access to British consular services worldwide.
The Isle of Man shipping registry has a reputation for quality and for a customer focused approach:
- The Isle of Man registry is on the Paris and Tokyo MOU white lists. It is recognised by the United States Coast Guard as a Qualship 21 flag and it is at the top of the industry’s flags by country performance table.
- The ship registry in the Isle of Man offers in-house expertise and availability 24 hours of every day and provides a fast response to any queries.
- The Isle of Man registry offers reasonable costs.
- In terms of tax obligations, corporate income tax in the Isle of Man is zero.
- There is flexibility in the requirements for registered owners, with a comprehensive list of accepted countries for ownership.
- The Isle of Man shipping registry allows ships to demise-in, enabling a transfer of registry and also allows ships to register on a demise charter registry other than in the Isle of Man (demise-out).
- It is a flag of choice for merchant vessels and commercial yachts and it is not designated as a flag of convenience.
The Isle of Man Aircraft Registry was established by the Isle of Man Government in 2007, primarily to bring additional economic prosperity to the Isle of Man’s private sector and to support the Business Aviation industry both on island and internationally. The Registry has earned a very good reputation, offers high international standards and competitive charges.
- The Isle of Man Aircraft Registry has registered more than 1000 aircraft since commencing operations and is now the second largest private business jet register in Europe and the sixth largest in the world.
- The Registry was named ‘Best Global Aviation Registry’ in 2019 and 2020 in World Commerce Review awards.
Key Advantages and Features of the Isle of Man Aircraft Register
- The Isle of Man register is one of the world’s leading private jet registers and offers a neutral nationality registration prefix: “M”.
- High regulatory standards,
- High service levels and qualified international reputation.
- The register operates on a commercial basis in terms of service delivery, but a “not for profit” basis in terms of cost.
- No capital gains taxes, no capital transfer tax and no general withholding taxes are payable in the Isle of Man. In addition, no insurance premium tax is payable.
- Corporation tax in the Isle of Man is zero and no insurance premium tax is payable.
- In terms of VAT, the Isle of Man is part of the UK VAT regime for the importation of aircraft into the EU.
- Stable political and legal jurisdiction.
P. A. Matthews BSc (Hons) FCCA FICA
S. Doyle ACIS
P. Harvey BA (Hons) TEP
M. Farror TEP MCSI
VAT Registration Number: GB 000 8920 15
Registered in Isle of Man
Company Number 45258
Dixcart Management (IOM) Limited is licensed by the Isle of Man Financial Services Authority
Isle of Man Office Information
Dixcart Management (IOM) Limited has over 30 years of experience in providing services to international clients, both companies and individuals, seeking to benefit from the organisation of their activities in the Isle of Man.
We act for a number of internationally wealthy clients with assets under management including investments, luxury yachts, property etc. and we work with lawyers, accountants and intermediaries throughout the world.
Isle of Man Office Services
A comprehensive range of corporate provider services are available from our office in the Isle of Man:
Management of Structures dedicated to asset protection
Dixcart can advise on the most appropriate structure to protect assets and optimise the income from those assets.
Yacht, Ship and Aircraft Registration
Dixcart Air Marine provides advice on the advantages and the tax and commercial efficiencies available in the Isle of Man. Dixcart in the Isle of Man has extensive expertise in ship registration.
Importation of a Yacht, Ship or Aircraft
Dixcart can provide all of the professional services needed to import a vessel into the Isle of Man, from the preparation planning beforehand, to ongoing importation requirements.
Annual Registration Requirements
Dixcart can help with all registration requirements and ongoing due diligence and documentation.
Accounting, Bookkeeping and Compliance
Due diligence, accounting, bookkeeping and support to ensure that all compliance requirements are fully met.
Ongoing Corporate Services
Dixcart offers a full, comprehensive range of management and secretarial services, including filing of appropriate returns and directorship arrangements, if needed.
Crewing and Payroll
Dixcart can provide payroll assistance and draft the appropriate contracts.