E-Charter Permission – FAQs
The much awaited e-charter permission has finally been launched by the Greek government and we are busy answering client questions to plan charters by way of the e-charter permission in Greece. We have compiled below the most commonly asked questions and answers for your better understanding of how the e-charter permission will work in practice. Please feel free to reach out to our team sea-greece.com for further information.1. Which yachts are eligible to apply for the e-charter permission?
Commercially registered on a foreign flag (non-Greek)Over 35m in lengthNon-wooden hull
2. What are the requirements to apply for the e-charter permission?
Registration of the yacht owning entity for VAT in Greece to allow for payment of VAT arising from charters performed in Greek waters by way of the e-charter permission.Fully signed charter agreement in place.Payment of the charter fee due (TEPADACH) to the Greek authorities.70% of the VAT on the charter fee due in Greece must be paid prior to charter commencement.The chartering of the vessel is the only commercial act carried out by the yacht owning entity within Greek territory.The yacht owning entity does not have a permanent establishment within Greece.
TECHNICAL DOCUMENTATION REQUIRED| For yachts below 500 GRT | For yachts above 500 GRT with maximum 12 passengers |
For yachts over 500 GRT with over 12 passengers |
|---|---|---|
| Greek Foreign Commercial Yacht Inspection Certificate (PEXEPA) |
Cargo Ship Safety Construction Certificate |
SOLAS Passengers Ship Safety Certificate |
| Cargo Ship Safety Radio Certificate |
Official Flag State Document Evidencing Number of Crew & Guest Berths |
|
| Cargo Ship Safety Equipment Certificate |
||
| Official Flag State Document Evidencing Number of Crew & Guest Berths |
The port authorities will only be able to approve the online e-charter permission application once all the above has been satisfied and the application has been completed and submitted with necessary supporting evidence including payment of 70% of the VAT and the TEPADACH due.3. How is the TEPADACH calculated?
Charters starting and ending in Greece must apply for an e-charter permission and must pay a special charter fee (TEPADACH) which is calculated by multiplying the relevant charter days to be performed in Greece by the applicable fee based on the yacht’s GT (see table below). A base fee of Euro 500 is applied in addition to calculated amount. TEPADACH CALCULATION BASED ON YACHT’S GROSS TONNAGE| YACHT GROSS TONNAGE | APPLICABLE FEE IN EURO (€) |
|---|---|
| GT ≤ 150 gt | 30 € |
| 150 < GT ≤ 250 gt | 40 € |
| 250 < GT ≤ 500 gt | 45 € |
| 500 < GT ≤ 1000 gt | 100 € |
| 1000 < GT ≤ 2000 gt | 115 € |
| 2,000 < GT ≤ 5000 gt | 130 € |
| GT > 5000 gt | 150 € |
For example, if a yacht obtains an e-charter permission to charter for 14 days in Greece and has a gross tonnage of 980GT then the Special Charter Fee applicable is: 14 (days) x 100 (GT fee) + 500 (base fee) = €1,9004. How does the yacht obtain a PEXEPA certificate (referred to in requirements above)?
This involves a class surveyor authorised by the Greek authorities surveying the yacht. Often the Greek branch of the yacht’s class society (if she is in class) can give instructions to the relevant class branch where the yacht is located to issue certificate. Otherwise if not in class, a surveyor can attend from Greece. Ideally if the intention is to apply for an e-charter permission for this summer the survey should be completed while the yacht is undergoing winter works so it is in place and ready for summer e-charter permission applications.5. How many charter days in Greece can be performed by way of the e-charter permission?
A yacht can charter for a maximum of 21 days per calendar year with the possibility to extend by 7 days allowing essentially for 28 days charter annually. For the avoidance of doubt a separate e-charter permission should be issued for each charter to be performed in Greece.6. What is the VAT rate applicable to charters performed in Greece?
For yachts able to carry out international voyages (as evidenced on their issued PEXEPA certificate – category I) the VAT rate applicable is 5.2%. For yachts able only to perform domestic voyages the VAT rate applicable shall be 6.5% (as per the yacht’s issued PEXEPA – category II) but this is unlikely to ever be the case considering size of vessels able to apply for the e-charter permission. 7. When must the VAT and TEPADACH due under the charter be paid by the stakeholder under the charter agreement to the Owner’s Greek fiscal agent to allow for the issuance of the e-charter permission?
100% of the VAT and TEPADACH due to be paid under the charter should be received by the fiscal agent from the stakeholder under the charter agreement no later than ten days prior to the commencement of the charter.Payment of the 70% VAT and TEPADACH due should be paid by the fiscal agent to the authorities at least one week in advance to ensure there are no delays with the issuance of the e-charter permission. The remaining 30% of the VAT held by the Greek fiscal agent shall be paid by the fiscal agent at the end of the relevant VAT quarter.8. What changes should be made to the charter agreement to reflect the necessary e-charter permission application to allow for the charter to take place in Greece?
Wording should be included in the relevant charter agreement to ensure that it is clear that all costs relating to the e-charter permission (if this is the Owner’s intention) are covered by the charterer and moreover to clarify that the stakeholder under the charter agreement can release the VAT and TEPADACH due under the proposed charter to the Greek fiscal agent two weeks prior to commencement of the charter with 70% of the VAT and the TEPADACH due to be paid by the fiscal agent following receipt and before charter start. 9. What happens to the 70% VAT and TEPADACH paid on behalf of the charterer by the Owner’s fiscal agent where an e-charter permission has been issued in the event the charter is cancelled?
A refund of sums paid will be obtained by the fiscal agent from the Greek tax authorities. We propose that wording should be included in any charter agreement with an e-charter permission in place to reflect that the Owner’s appointed fiscal agent will make best efforts and prompt arrangements for the refund of all sums paid (70% of VAT and TEPADACH) by the Greek state upon charter cancellation but that the Owner shall not be liable for any delay in the return of such funds by the Greek state.The charter days for which the e-charter permission was initially issued will not be counted to the total amount of charter days permitted annually.10. Does the owning company of the yacht have to apply for an e-charter permission for charters starting and ending outside of Greece?
There is no need for an e-charter permission to be in place where the charter starts and ends outside of Greece. Transiting yachts must simply declare proposed transit on the e-charter permission application online but do not have to apply for an e-charter permission. Such transiting usage is subject to paying the Special Charter Fee (“TEPADACH Plus”) for all yachts irrespective of size as set out in more detail below. Keep in mind that transiting yachts cannot embark and disembark guests in Greece and the passenger list on entry must be the same on exit.11. Do yachts starting or ending charters outside of Greece need to apply for an e-charter permission?
If the yacht will start or end a charter outside of Greece then the yacht shall apply for a “e-charter permission plus” and a special charter fee called “TEPADACH Plus” shall be due. 12. How is the TEPADACH Plus calculated?
The TEPADACH Plus is calculated by applying the base fee of Euro 500, in addition to the fee based on the yacht’s GT (see TEPADACH table above) and an additional fee based on the length of the yacht (see table below) multiplied by the charter days to be completed in Greece. TEPADACH CALCULATION BASED ON YACHT’S LENGTH OVERALL| YACHT’S TOTAL LENGTH IN METRES (TL) | APPLICABLE FEE IN EURO (€) |
|---|---|
| TL ≤ 15 m | 30 € |
| 15 < TL ≤ 20 m | 110 € |
| 20 < TL ≤ 25 m | 160 € |
| 25 < TL ≤ 30 m | 450 € |
| 30 < TL ≤ 35 m | 550 € |
| 35 < TL ≤ 40 m | 800 € |
| 40 < TL ≤ 45 m | 1,400 € |
| 45 < TL ≤ 50 m | 1,750 € |
| 50 < TL ≤ 60 m | 2,600 € |
| 60 < TL ≤ 70 m | 4,200 € |
| 70 < TL ≤ 85 m | 5,600 € |
| 85 < TL ≤ 100 m | 7,500 € |
| TL > 100 m | 18,000 € |
For example, if a yacht is chartered for 14 days in Greece and has a gross tonnage of 980GT, with length overall of 51m then the Special Charter Fee applicable is: [100 (GT fee) + 2,600 (TL fee)] x 14 (days) + 500 (base fee) = €38,30013. Can the terms of the charter agreement be amended?
The date and time of the charter start and/or end can be amended at any given time prior to the initial declared charter start date and time. However, following the commencement of the charter, the term of the charter can only be amended in respect of the date and time of the charter end.Any amount paid to the Greek authorities (whether VAT or TEPADACH) will be refunded on a pro rata basis to the yacht owning company where the charter period has been reduced or in the event the charter term is extended additional amounts as due must be paid to the state.Submission to the Greek authorities of the updated charterparty is a pre-requisite in both cases. It is important to note that the guest list cannot change more than 75%. In the event changes to the guests on board are over 75% the charter agreement will be cancelled automatically by the state.14. In Greece UBOs and their direct family members can use their commercially registered yachts privately. In such cases is an e-charter permission required?
Where UBOs and/or their direct family members intend to use their commercially registered yachts in Greece privately an e-charter permission is not required but the intended private use should be declared on the e-charter permission application online. It is important to note that it is unlawful for UBOs and direct family members to charter their beneficially owned commercially registered vessels in Greece.
VAT at 24% is due on the cost of use by the UBO. We are awaiting written confirmation from the tax authorities as to how the cost of use is calculated and for the time being we are advising clients that they should apply a 50% discount on the charter rate to calculate the cost of use.