The Cyprus government has taken the decision recently to abolish VAT levied on luxury yachts berthed in the country's marinas, much to the delight of the Cyprus Shipping Council.
The tax, which was set at a rate of 30% for vessels berthing in the country for six months or more was highly unpopular amongst the yachting community and was criticised for deterring wealthy tourists at a time of particular economic fragility.
Commenting on the move Cyprus Shipping Council President, Andreas Droussiotis, told the Financial Mirror this week: "We do not object to the VAT, because that is normal in Europe. But no other country in the EU has a 30% luxury tax."
In an effort to show that such a high rate of tax benefited neither the yachting industry nor the government, a study was commissioned by opponents of the tax earlier in the year. It found that the government did not significantly increase its revenue as the majority of yacht owners were deterred from berthing as a result of the VAT.
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