A company deducts VAT on a yacht or jet only if it runs a genuine charter or leasing business at market prices; owner use must then be paid for or taxed. Free private use is a hidden profit distribution in Luxembourg and wages in kind or a hidden distribution in the Netherlands. Dutch bijtelling is 22% of catalogue value, or 35% of market value for cars older than 16 years; a classic car imported used pays no BPM. Luxembourg taxes a combustion company car at 2% of the new price a month. An SPF cannot hold any of these assets.
A company can own a yacht, a jet or a classic car. The tax follows the use
Owners often assume that putting a yacht, an aircraft or a valuable car into a company saves VAT and turns running costs into deductible expenses. More often it moves the tax: the company deducts, and the owner is taxed on the private use. Or the company cannot deduct at all, because owning a pleasure asset is not a business.
Three questions decide almost every case. Is the asset used for a real economic activity, such as chartering at market rates? How much does the owner and his family use it, and do they pay for that use? And where is the asset registered, operated and used? VAT is harmonised, so Luxembourg and the Netherlands answer the first question alike. They differ on corporate tax, the director's private use and car taxes.
Three worked examples follow: a EUR 3 million yacht in a Luxembourg SARL, a 1972 classic car and an EUR 8 million jet in Dutch B.V.s. For ordinary company cars see our company car tax note; for buildings, the property company note.
17% or 21%
Luxembourg and Dutch standard rates on purchase and charter.
23.87% / 25.8%
Luxembourg City 2026; Dutch Vpb above EUR 200,000 (19% below).
22% or 35%
Catalogue value, or market value for cars older than 16 years.
2% a month
Benefit in kind for a combustion company car, on the new price.
When the company can deduct the VAT, and when it cannot
Economic activity first. A company deducts input VAT only on goods used for its taxed transactions. Buying a yacht and letting the owner use it is not an economic activity. The Court of Justice set the test in Enkler (C-230/94, 1996), a case about a motor caravan: the asset must be exploited to obtain income on a continuing basis. The authorities compare actual use with normal commercial exploitation: charter days, prices, marketing, customers. A yacht chartered to two friends for a nominal fee fails.
Charter at arm's length. If the company runs a genuine charter business, it deducts the VAT on purchase and costs. The owner's own weeks must then be invoiced at market rates, or taxed as private use of a business asset under Articles 16 and 26 of the VAT Directive. Charter is a hire of a means of transport. For short-term hire, up to 90 days for vessels and 30 days for other means of transport, VAT is due where the yacht is physically put at the customer's disposal (Article 56(1)). A Luxembourg company chartering out of Antibes charges French VAT and registers in France. Long-term hire to private customers is taxed where the customer lives, but for pleasure boats put at disposal from the supplier's establishment, where the boat is handed over (Article 56(2)).
Leasing schemes. Several Member States let a company lease a yacht to its owner with VAT charged only on a flat share of the lease, assuming that big yachts spend time outside EU waters. In March 2018 the Commission sent letters of formal notice to Malta, Greece and Cyprus, followed by Italy in November 2018 and reasoned opinions to Italy and Cyprus in July 2019. A reduction needs proof of actual use outside the EU. Malta replaced its flat percentages with an actual-use method based on logs and GPS data. In Commission v Italy (C-341/20, 16 September 2021) the Court held that Italy could not exempt fuel for chartered pleasure craft from excise duty just because a charter contract existed; what counts is the actual commercial use.
Under Halifax (C-255/02, 2006), transactions whose essential aim is a tax advantage contrary to the purpose of the VAT rules are redefined, and deduction is refused. Under Mercedes-Benz Financial Services (C-164/16, 2017), a lease with a purchase option is a supply of goods where exercising the option is the only economically rational choice. VAT is then due upfront on the full price, not instalment by instalment. Most owner-lease structures fall in that box.
| Situation | VAT on purchase | Owner use |
|---|---|---|
| Genuine charter business, market prices | Deductible | Invoice at market rate or tax as private use |
| Owner use only, no charter | Not deductible | Outside VAT; corporate and income tax still apply |
| Lease to owner with purchase option | Supply of goods; VAT upfront | Treated as a sale |
| Jet used for the company's own business | Deductible for business share | Private flights excluded or taxed |
New means of transport. A boat longer than 7.5 metres is 'new' for VAT if it was supplied within three months of first entry into service or has sailed no more than 100 hours. An aircraft of more than 1,550 kg take-off weight is new within three months or 40 flying hours; a car within six months or 6,000 km. It is taxed where it ends up, even if bought by a private person. A Luxembourg company buying a new yacht from an Italian yard self-assesses 17% Luxembourg VAT as an intra-EU acquisition. Registration in Luxembourg or the Netherlands comes first.
Law and practice: VAT Directive 2006/112/EC, Articles 2(2)(b), 9, 16, 26, 56, 59a and 168; Implementing Regulation (EU) No 282/2011, Articles 38 and 39; CJEU C-230/94 Enkler, C-255/02 Halifax, C-164/16 Mercedes-Benz Financial Services UK, C-341/20 Commission v Italy; European Commission infringement decisions of 8 March 2018, 8 November 2018 and 25 July 2019.
Registers, operating rules and customs
Yachts in Luxembourg. Landlocked Luxembourg has two registers. The maritime register under the amended Law of 9 November 1990 is for commercially operated seagoing ships, first registered at under 15 years of age, owned more than half by EU nationals or EU companies, with all or a significant part of their management in Luxembourg. A Luxembourg company operating a yacht for income needs accreditation as a shipping company, whatever the flag. Private pleasure craft go on a separate register of recreational craft under the Law of 23 September 1997, run by the Commissariat aux affaires maritimes. A company may register if its seat is in an EU Member State and it has a Luxembourg branch, again with more than 50% EU ownership.
Yachts in the Netherlands. Dutch-flagged ships are entered in the ship register kept by the Kadaster. Pleasure craft often sail instead under an international certificate for pleasure craft.
Aircraft. Luxembourg aircraft are registered with the Direction de l'aviation civile; Dutch aircraft in the register kept by the Human Environment and Transport Inspectorate (ILT). Under EU Regulation 965/2012, an owner flying its own people is a non-commercial operator: Part-NCO for simpler aircraft, Part-NCC with a declaration for complex motor-powered aircraft, which includes almost every business jet. Charter needs an air operator certificate (AOC).
Customs. Temporary admission under Article 250 of the Union Customs Code lets a non-EU resident use a yacht or aircraft registered outside the EU without paying duty or import VAT, for limited periods. It is not available once a Luxembourg or Dutch company owns the asset. An EU company owner means import VAT and, for yachts, customs duty on entry, unless the asset is already in free circulation.
Crew, liability, insurance. The company employs or contracts the crew, so employment law, social security and the Maritime Labour Convention apply to it. Liability insurance is compulsory. The company limits the owner's liability only if it is run as a company, with its own contracts, accounts and decisions.
Law and practice: Luxembourg: amended Law of 9 November 1990 creating a Luxembourg public maritime register, Article 130; Law of 23 September 1997 on pleasure navigation; Guichet.lu, 'Registration or identification of a recreational craft under the Luxembourg flag'. Regulation (EU) No 965/2012 (air operations), Annexes VI and VII; Regulation (EU) No 952/2013, Article 250.
Corporate tax, net wealth tax and the owner's weeks
A Luxembourg SARL or SA owning a yacht pays 23.87% in Luxembourg City in 2026, including municipal business tax and the solidarity surcharge, and net wealth tax of 0.5% with an annual minimum. Crew, berth, insurance, maintenance and depreciation are deductible from charter income. Losses can be carried forward for 17 years.
The weak point is the owner. If he uses the yacht free of charge, the company has made a hidden profit distribution (distribution cachée de bénéfices) under Article 164(3) of the income tax law. The arm's length value of the use is added back to profit and treated as a dividend, with 15% withholding tax unless an exemption or treaty applies. If the yacht mainly serves the owner, the costs themselves can be refused.
Not an SPF. The family wealth company (SPF) may only acquire, hold, manage and realise financial assets and may not carry on commercial activity. A yacht, a jet or a car is not a financial asset. A charter business is a commercial activity. Neither the asset nor the operating company fits; our SPF note sets out the limits and the 2025 sanctions.
A SARL buys a new 30-metre yacht from an Italian yard for EUR 3 million. As an intra-EU acquisition of a new means of transport, it self-assesses Luxembourg VAT of 17%, EUR 510,000, and deducts it in the same return, because it runs a charter business through a broker. It is chartered for 10 weeks at EUR 45,000 a week, EUR 450,000, from Antibes with French VAT. The owner uses it for 4 weeks. Running costs are EUR 300,000 a year; depreciation over 15 years to a 25% residual value is EUR 150,000.
Owner pays market rate: 4 × EUR 45,000 = EUR 180,000, invoiced with VAT. Profit is EUR 450,000 + EUR 180,000 − EUR 450,000 = EUR 180,000; tax at 23.87% is EUR 42,966. The deduction stands.
Owner pays nothing: profit is nil on paper. The authorities add back EUR 180,000 as a hidden distribution: corporate tax of EUR 42,966 and withholding of EUR 27,000. VAT is also due on private use: 4/52 of EUR 450,000 of costs gives VAT of about EUR 5,900, but measured against 14 weeks of actual use about EUR 21,900.
Owner uses it 12 weeks and charters 2 to friends: no economic activity under Enkler. The EUR 510,000 is at risk, plus interest and penalties.
With genuine charter and paid owner use, the structure is neutral: the owner pays VAT on what he consumes and the company pays tax on its margin. Without charter, a company adds cost and risk.
Law and practice: Luxembourg Income Tax Law (LIR), Articles 114 and 164(3); Net Wealth Tax Law of 16 October 1934, as amended; Law of 11 May 2007 on the SPF, Articles 2 and 3; AED Circular No 823 of 27 December 2024 on the SPF; Guichet.lu, corporate tax rates 2026.
Bijtelling, BPM, motor vehicle tax and the Luxembourg benefit in kind
Netherlands. A director-major shareholder (DGA) who can use a B.V. car privately is taxed on a fixed percentage, the bijtelling, unless private use stays below 500 km a year with proof. In 2026 it is 22% of the catalogue value for cars with CO2 emissions; zero-emission cars get 18% on the first EUR 30,000. For cars older than 16 years, a threshold raised from 15 in 2026, the youngtimer rule replaces this with 35% of the value in economic traffic, the market value. The Tax Plan 2027 proposes 17 years for 2027 and 20 from 2028.
| Dutch tax | Modern car | Classic car (1972) |
|---|---|---|
| Bijtelling 2026 | 22% of catalogue value (18% EV up to EUR 30,000) | 35% of market value |
| BPM on registration | On CO2, reduced for age if imported used | Nil under the flat-rate table if first admitted at least 17 years and 10 months ago |
| Motor vehicle tax (MRB) | Weight, fuel and province | Exempt from 40 years |
| VAT private-use correction | 2.7% of catalogue value a year | 1.5% if no VAT was deducted, capped by VAT on costs |
| Corporate tax | Costs deductible at 19% / 25.8% | Depreciation only above a realistic residual value |
Luxembourg. The benefit in kind is a monthly percentage of the price of the new car including VAT and options. Since 2025 it is a flat 2% a month, 24% a year, for combustion and hybrid cars without an earlier contract; electric cars pay 0.5% or 0.6%. Annual vehicle tax depends on CO2 emissions; historic vehicles follow their own registration rules with the SNCA. For a classic car the 'new price' means little; expect the purchase price to be used.
A B.V. buys a 1972 sports car from a German collector for EUR 180,000. It is a private sale, so no VAT. On registration in the Netherlands the B.V. files a BPM declaration; under the flat-rate table the BPM is nil. The car is 54 years old and pays no motor vehicle tax. The DGA uses it for weekend drives.
Bijtelling: 35% × EUR 180,000 = EUR 63,000 a year, added to his salary. In the 49.50% bracket that costs EUR 31,185 a year. The B.V. deducts insurance, maintenance and storage, say EUR 9,000, but cannot depreciate a classic that holds its value. The VAT correction is 1.5% of the catalogue value, but capped by the VAT deducted on running costs, which is small.
Bought privately, the car costs nothing extra a year and, kept for personal use, generally stays outside box 3. For a pleasure car a B.V. is usually the expensive option. A DGA contribution reduces the bijtelling euro for euro; a shareholder loan can fund a private purchase.
Law and practice: Wet LB 1964, Article 13bis; Wet BPM 1992 and the Belastingdienst flat-rate depreciation table; Wet MRB 1994 (vehicles of 40 years and older); Belastingdienst, 'Bijtelling privégebruik auto 2026' and 'Btw en privégebruik auto van de zaak'; Luxembourg Grand-Ducal Regulation of 23 December 2016 as amended on 20 December 2024.
Business trips, family holidays and the arm's length test
A jet is deductible business equipment of a B.V. to the extent the business needs it. Costs that serve the shareholder are not business expenses. Family flights are either wages in kind for the DGA, valued at what a third party would pay, or a hidden distribution (verkapte uitdeling). That means 15% dividend withholding and box 2 tax at 24.5% up to EUR 68,843 and 31% above.
For VAT, the B.V. deducts the business share. Under the Dutch decree on exclusion of deduction (BUA), VAT on goods and services supplied to staff for private use is not deductible above a small threshold, and the DGA counts as staff.
A Dutch holding B.V. with consulting income buys a used business jet for EUR 8 million and imports it from the United States. Import VAT at 21% is EUR 1.68 million. The jet flies 200 hours a year: 150 for business, 50 for family holidays. Annual costs are EUR 1.4 million for crew, maintenance, hangar, insurance and fuel, plus depreciation of EUR 400,000, so EUR 9,000 an hour.
VAT: about 75% of the import VAT, EUR 1.26 million, is deductible; EUR 420,000 is not, and later years are revised.
Wages in kind: 50 family hours at a charter rate of EUR 8,000 an hour is EUR 400,000. At 49.50% the DGA pays about EUR 198,000.
Corporate tax: the B.V. deducts EUR 1.8 million of costs.
Alternative: the DGA reimburses EUR 400,000 plus VAT for the family flights. No wages in kind, and the deduction is defensible.
Operations: the B.V. flies under Part-NCC; leasing idle hours to an AOC holder at market rates turns cost into income.
If the shareholder lives outside the Netherlands, his home state may tax the family use too. Many states look through a company that holds only private assets. See CFC rules and your home country.
Law and practice: Wet Vpb 1969, Articles 8 and 22; Wet LB 1964, Article 13; Wet op de dividendbelasting 1965; Besluit uitsluiting aftrek omzetbelasting 1968 (BUA); Belastingdienst, box 2 rates 2026; Regulation (EU) No 965/2012, Annex VII (Part-NCC).
Substance, abuse and the questions an inspector asks
The inspector's questions are predictable. Who decides on the yacht's use, and where? Who signs the charter contracts? Are prices those of a broker's catalogue? Does the owner have priority over paying guests? Where are the logbooks? A company with no office, no staff and a director abroad may not even be resident; see Luxembourg substance and Dutch substance.
- Charter without customers. Charters only to friends, relatives or related companies, or at a fraction of market price, fail the economic activity test.
- Lease with a purchase option. If buying the asset at the end is the only rational choice, VAT is due upfront on the full price.
- Flat-rate use outside the EU. Since the Commission's infringement cases, reductions need logs and GPS proof of actual use.
- Free owner use. A hidden distribution in Luxembourg, wages in kind or verkapte uitdeling in the Netherlands.
- SPF ownership. Not allowed: no non-financial assets, no commercial activity.
- Home-country rules. CFC, look-through or wealth taxes may tax the asset or its use in the owner's state of residence.
Families with several assets often use a family office structure. None fixes free private use of a company yacht.
Law and practice: Council Directive (EU) 2016/1164 (ATAD), Articles 6 and 7; Luxembourg LIR, Articles 164(3) and 164ter; Dutch Algemene wet inzake rijksbelastingen and fraus legis case law; CJEU C-255/02 Halifax.
Check VAT, the private-use benefit and the red flags
Choose the asset, the country and the use. The checker applies the 2026 rules above in simplified form: an orientation, not an opinion.
Yacht, aircraft or car in a company: first check
Describe the asset, the company and how it is used. You get an indication of whether the VAT on the purchase can be recovered, an estimate of the annual taxable private-use benefit, registration notes, red flags and next steps.
Genuine charter at market rates or no VAT deduction.
Owner use at arm's length, or a taxable benefit.
Dutch bijtelling on market value for cars older than 16 years.
Yachts, jets and cars are not financial assets.
Yachts, aircraft and cars in a company: frequent questions
Can a Luxembourg or Dutch company recover the VAT on a yacht?
Only if the yacht is used for a genuine economic activity, in practice chartering to third parties at market rates on a regular basis. Owner use must then be paid for at arm's length or taxed as private use. A yacht kept for the owner's pleasure gives no right to deduct, whatever the company form.
What is the Dutch bijtelling on a classic car owned by a B.V.?
For a car older than 16 years in 2026, 35% of its value in economic traffic, the market value, instead of 22% of the catalogue value. A EUR 180,000 classic used privately adds EUR 63,000 a year to the director's taxable income.
Does a classic car pay BPM when it is registered in the Netherlands?
For a used imported car first admitted at least 17 years and 10 months ago, the Belastingdienst's flat-rate depreciation table brings the BPM to nil. A declaration is still required. Cars of 40 years or older are also exempt from motor vehicle tax.
Can a Luxembourg SPF own a yacht, a jet or a car collection?
No. An SPF may only acquire, hold, manage and realise financial assets and may carry on no commercial activity. A yacht, an aircraft or a car is not a financial asset.
What did the European Commission do about yacht leasing schemes?
In 2018 and 2019 it opened infringement procedures against Malta, Greece, Cyprus and Italy over flat-rate VAT reductions on yacht leases. Malta moved to an actual-use method.
Is a private jet owned by a B.V. allowed to fly charters?
Not on its own. Commercial air transport needs an air operator certificate. A B.V. flying only its own people operates non-commercially, for a business jet under Part-NCC. Charter income usually comes through an AOC holder.