Yachts, either pleasure or commercial, are allowed to register in RIN-MAR.
The formalities for registration differ one from the other but in all cases start with the lodging of an application form.
Alike in Commercial Vessels the Technical Commission of RIN-MAR has the power to accept or deny the registration of a yacht based on technical and legal grounds.
Yachts are subject to inspections carried out by MAR’s inspectors or by Classification Societies by delegation. Inspections are made at the time of the registration of the yacht and as a condition thereof and subsequently every three years, for pleasure yachts and every year for commercial yachts. Dry dock inspections of commercial yachts are required every two years.
The registration and maintenance of the yachts with MAR give rise to the payment of the respective fees to the authorities.
The crew on board commercial yachts registered in MAR will be exempt from personal income taxes and will benefit from a flexible social security regime. In fact, non-Portuguese crew members are not obliged to contribute to the Portuguese social security regime, provided that an alternative pension scheme is guaranteed. However, the crew may choose the Portuguese voluntary social security regime or any other type of protection scheme, public or private. On the other hand, Portuguese nationals or residents in Portuguese territory shall be mandatorily covered by the general Portuguese social security regime. A total contribution rate of 2,7% will be applicable, of which 2,0% shall be borne by the employing entity and 0,7% by the employee.
There are no citizenship requirements for the crew on board the commercial yachts registered in MAR.
VAT on acquisition of Non EU yachts
Normally, as the importation rarely occurs in Portugal, although it may be made by a Portuguese company, it would not be liable to Portuguese VAT as the yacht will not enter into Portuguese waters and shall not, assumedly, be subject to custom clearance in Portuguese/Madeira Territory. In so being VAT shall not be an issue in Portugal. The Portuguese tax authorities can, nevertheless, request an evidence of the VAT payment overseas in case of inspection.
VAT on the acquisition of EU yachts
Should the acquisition of the yacht be made via a Madeira/Portuguese company and the vessel be accounted as part of its fixed movable assets, the Regime of Intra-Community Supply of Goods should apply. In this case the Madeira Company should use the VAT reverse charge mechanism (it makes the declaration of both its purchase (input VAT) and the supplier’s sale (output VAT) in its VAT return. In this way, the two entries cancel each other from a cash payment perspective in the same return).
Chartering of yachts
The Portuguese flag, being a EU flag, is permitted by the European laws and regulations to be used within EU in chartering services. Although these services should be allowed to all EU established owners irrespectively of the flag flown by their yachts, some EU member states tend to render difficult the chartering activities by non EU flagged vessels.
The localization rules of the chartering contracts in Portugal are the same as those applicable in the majority of the European members States and VAT is a harmonized tax at the level of the Union.
In so being short time yacht charters (those for a period not exceeding 90 days) are taxed at the country where the yacht is actually put at the disposal of the customer. As the charter normally does not start in Portugal no Portuguese VAT will be due.