Palma, Mallorca; Spain—June 20-21, 2011

Superyachts 2011: All Aboard
What’s happening in the superyacht world behind closed doors?

This past Monday, Alex McBarnet of United Trust set out for Palma, Mallorca. The goal: suss out the industry’s secrets at the annual “Future of Superyachts” conference.

But the mood in Mallorca was anything but secretive. In a conference room at the five-star Nixe Palace Hotel, the curtains were indeed drawn, though this was only to protect against the powerful sun—and let guests view the speakers’ PowerPoints. Gathered were approximately 100 professionals, poised to exchange superyacht updates, legal news, tax and regulatory information from all over the world.

Who were the fortunate 100 attendees? Tax advisors and lawyers. Insurance people and corporate-services providers. Yacht managers, brokers, and builders, among others, all eager to learn more.

So, what are the key issues facing the superyacht industry, now and in the future?

There was much talk about European Union tax laws that apply to superyachts. Specifically, conference delegates voiced objections to the wide tax disparities between jurisdictions in Europe—disparities so wide that the European Commission has intervened to help create fairness.

Tax-wise, Spain is among the most challenged places in Europe. The country levies a Value Added Tax of 18 percent on superyachts, plus a special Matriculation Tax of 12 percent. One presenter saw red when discussing this, referring to the fees as “criminal.” Many on the yachting scene have apparently fled Spain as a result of the punishing tax figures. These days, there are only approximately 40 superyachts domiciled in Spain.

Contrast this with, say, France as a jurisdiction, and the disparities abound. France has no such “special tax” for superyachts. Plus, all yachts that meet the French criteria for commercial use are exempt from Value-Added Tax.

This may sound like a clear-cut case for choosing France over Spain when structuring superyachts as assets. But no such clarity exists. Consider this: Spain’s Matriculation Tax is being challenged fiercely, and it may well be repealed. In fact, when it comes to all laws and directives, the tides are changing constantly—particularly given the global trend toward greater fiscal and financial regulation.

Beyond the France/Spain disparity, stormy relationships are afflicting other jurisdictions. A key reason: each country interprets the European VAT (Value Added Tax) Directive in different ways. This makes it tough to find a common trajectory—and to effect fairness—on the seas.

By the second day of the conference, there was a clear call to form a single, unified, “supranational” superyacht organization. The feeling was that this solidarity could benefit enormously the business—and the pleasure—of the underrepresented yachting world.

By yesterday, the Future of Superyachts Conference had ended and the Superyacht Cup was had just begun. Largely washed away were conflicts over laws and taxes: the honest thrill of this stupendous race was already asserting its magnetic pull.