VAT for Marine Services

VAT for Marine Services

Since a few days now some services in marinas, in particular some short time moorings, have become subject to VAT. The applicable VAT is 18% at this time. Exempted are all services over 500 million TL (about Euros 270). Thus, an annual contract is not subject to VAT, while daily mooring often is.

Relevant is the total amount on one single invoice. If several services can be compounded their total exceeds 500 millions (ex VAT) then the invoice is to be issued free of VAT. However, services have actually to be invoiced within 7 days as of completion.

The new regulation is a result of the government resolution number 7765, as published in the official announcements August 27, 2004, number 25566 and is valid as of publication. The VAT in Turkey is regulated by the Law concerning VAT (number 3065).

Article 13, section 2 of this law states that “Services rendered by operators of ports and airports to transport vessels for sea and air are exempted from VAT”. While debates have been going on whether yachts are transport vessels and marinas are ports (with this exemption probably the legislation had in mind port services to commercial shiping like reloading of containers) this exemption was applied by all marinas in Turkey. The threshhold of 500 million TL suggests that the new regulations is actually designed to protect the commercial shipping of “petty matters” and may be reversed for yachts in due course.

Not pleased are also the accountants of marinas who expect some complicated arguments with clients.

As usual: carefully researched, but I do not accept liabilities due to this news.