It’s natural to assume that an 88-meter (289-foot) megayacht would feature plentiful guest staterooms. And you’d be right, if you were thinking about a project other than Orchid. This code-named concept collaboration between Luiz De Basto Designs and Lürssen accommodates just eight guests, with large windows in the four staterooms to take in the view. The designer and builder have kept the number down to increase the amount of space devoted to saloons, dining areas, alfresco spaces, and other entertainment and relaxation areas that everyone can use.

Considering Orchid encompasses six decks, that should translate into plenty of room for these spaces. It’s interesting to note that the project didn’t start out with a set number of decks, unlike most concepts and even real superyachts. Rather, De Basto explains, the amenities he and the yard wanted to incorporate dictated the height.

So what will an owner and his guests get if Orchid is signed to a contract? A pool located just inside sliding doors on the aft main deck, for one; an interesting and unusual sight when boarding, no doubt. (There's another pool, this type elliptical in shape, one deck up and out in the sunshine.) Alternately, guests can board at a fold-down balcony along Orchid’s side on the lower deck, a few paces away from a private theater. For on-the-water play, the tender garage is accessible via an elevator, which can whisk guests down from the bridge deck. Even the crew gets a dedicated elevator to get them down here in a hurry. Lift-up hatches let the toys launch and be retrieved. After a hard day’s play, what better way to relax than with a glass of wine from the sure-to-be-immense wine “cellar.”

Of course, the owner’s suite benefits from the abundant room, too. It’s a two-level affair, with the bedroom on the main deck and a private stairway leading to a lounge on the upper deck, where the wheelhouse would normally be. It makes for a 245-square-meter (about 2,640-square-foot) suite.

The wheelhouse gets bumped up to the bridge deck, where there are also port and starboard wing stations. For the overall crew’s benefit (or that of anyone wanting a bit of exercise), each deck has walkaround space and is connected to the next via sets of stairs.

More news to follow if the concept comes to fruition. In the meantime, this slideshow should give you a better idea of what De Basto’s design is all about.

Docking at a marina is more than just the equivalent of finding a parking space. Especially for a megayacht owner, crew, and guests, it’s about receiving a certain level of service. With that in mind, Vilanova Grand Marina (above) has signed a multi-year agreement with BWA Yachting.

BWA Yachting will provide concierge services such as provisioning and jet/helicopter rental, but also other essential services for the guests of the marina, which is located in Vilanova i la Geltrú, about 35 minutes outside of Barcelona. These include assistance with yacht clearances, custom and immigration procedures, berth reservations, bunkering, banking transactions, and itinerary planning.

To provide a more hands-on relationship, BWA Yachting will open an office at the 49-slip Vilanova Grand Marina, which accommodates superyachts to 80 meters (262 feet). According to the marina’s management team, it has enjoyed a 60-percent occupancy rate since opening in April 2009, and Spain is increasingly growing as an off-season destination. To that point, the marina also has a refit and repair yard on site, and BWA Yachting can assist with freight services.

As I mentioned in the monthly Megayacht News e-newsletter recently, the Maritime Labour Convention 2006 (MLC 2006) could have an unintentional detrimental impact on the yachting business and yacht buying when it goes into effect in 2012. In brief, MLC 2006 sets out a “seafarers bill of rights,” to ensure crewmembers of all types of vessels have adequate working and living conditions, and that insurance and other benefits are made available. Several industry organizations are working with the International Labour Organization (ILO), the UN agency overseeing its implementation, to ensure that the voices of superyacht owners, crew, builders, designers, and others in the industry are heard.

To be clear, all of the industry groups support the spirit and goal of MLC 2006. Their concern lies with how some of the requirements would greatly reduce or even eliminate some guest staterooms and general gathering areas. As Rod Hatch, a Professional Yachtsmen’s Association (PYA) council member, explained to fellow members in April, “The outcome may even show in some cases that in order to accommodate the number of crew required to run a particular yacht, if they were all housed in MLC standard accommodation, the owner would have to move ashore.”

Because of its lobbying efforts, PYA was asked by the ILO Secretariat to conduct two studies to assess the potential impact of MLC 2006. The first study, already completed, solicited input from builders and designers, who submitted accommodations plans demonstrating pre- and post-MLC 2006 implementation. Now, PYA is conducting the second study. Written by the Seafarers International Research Centre, a global authority on issues affecting crewmembers, it intends to gather facts about crew employment and working conditions.

If you are the owner of a yacht, please make sure your captain and crew complete the survey. If you’re a broker, shipyard representative, or other industry representative with ties to crew, forward this on to them. There’s no need to be a PYA member. Those of you who are captains or crewmembers presently employed aboard a megayacht, the survey should take just 15 minutes. And even if you aren’t currently employed in either of those capacities but have been within the past year, please also fill it out. The PYA wants and needs as many voices as possible to present accurate findings.

PYA will release the results of both studies after presenting them to the ILO later this year.

When Force Blue was seized in Italy over alleged tax evasion, many megayacht owners and their advisors sat up and took notice. It also led to questions and concerns, understandably, many of which persist.

To shed some light onto Italian VAT practices, Moore Stephens prepared the following educational—and frank—overview for its clients, which Megayacht News received permission to run. The firm, which provides accounting, tax, and consulting services to yacht owners around the world, stresses that it is a general summary and recommends speaking with your agent (Moore Stephens or otherwise) to determine your best course of action.

SWITCHEROO—ITALIAN STYLE

Two steps forward, two steps back. Italy has been shaking it all about so far this year. And after all that effort, by June 21 the Italian tax police were virtually back where they started the year.

The past three months have provided a perfect illustration of the Guardia’s frantic footwork. They have been marked by a number of high-profile yacht arrests, the most dramatic of which has been of the 63-metre Force Blue, which for maximum effect the Guardia prosecuted with armed officers on gunboats and videoed. The yachts were supposedly arrested for reasons ranging from flag (non-EU) to smuggling to suspected tax evasion. But the announcement on June 21st of the conditional release from detention of the Cayman Islands flagged Force Blue to carry on with its charter trade as before, along the Mediterranean and Italian coasts, reflects continuing confusion about Italy’s perspective on the VAT rules for commercial yachts.

On the practical side, the Italian authorities have since 2004 appeared to endorse the French approach which assimilates commercial yachts meeting specified criteria to the class of “merchant” ships and exempts them from VAT. This meant that a yacht holding a commercial registration certificate from any Flag State, having a permanent crew and operating in a bona fide commercial way was neither asked to have a VAT registration in Italy nor required to undergo any kind of customs import procedure. Like in France the VAT exemption appeared to apply to such yacht owners by default, both on the supplies they made with the yacht and the goods and services they received from others. They could perform charters in Italy, buy parts and equipment and receive services of repair and maintenance for their yachts, all free of Italian VAT. It all seemed so favorable and safe, so the sudden switch to militancy has shocked the industry somewhat.

But should it really? Speaking on Italian VAT practice on yachts at a conference some years ago, one Italian expert panelist pointed revealingly to the distinction between the formal way and “the Italian way.” He was referring to the yawning gap between Italy’s VAT legislation on yachts and its on-the-ground practice. Spanning the gap is a fairyland of high hopes and wishful thinking, upon which the legal obligations of the real world crash every so often. Witness for instance the constant dogfights between Italian leasing companies and the authorities over the scope of application of the reduced-rate VAT. Characteristically, the leasing activities rely heavily on tertiary practice and extra-statutory concessions, rather than primary law, allowing the authorities to shuffle capriciously at every step. The leasing companies often have different interpretations from what the authorities think. With the advent of the new EU cross-border place of supply rules from January 2010, nobody seems to be sure anymore as to how Italian leasing schemes should actually interact with the new rules.

Little wonder then why a negative undercurrent has been washing away at this fragile picture of a VAT-free Italy for superyachts. Italy’s legislation on the VAT treatment of yachts, unlike France’s, has actually remained unchanged. The law maintains the typological distinction between classes of vessels. There is the class of “qualifying ships” which is traditionally deemed to be eligible for VAT exemption under Article 148 of the VAT Directive. This class is interpreted to include only “merchant” and “cruise” ships that go on the high seas—their activities have “export” connotations for VAT purposes. Also included are other utilitarian types like the submarine, hovercraft, dredger, fire float, light vessel, and the mobile floating dock or crane. Then there is the class of “pleasure craft” (so called because they are designed or adapted for use for recreation or pleasure), which is not exempt from VAT. Yachts, whatever their function and manner of operation, are classed as pleasure craft under this traditional view. Therefore, unless a yacht is VAT paid, or deemed VAT paid, it is non-compliant and should not be used or chartered in the EU.

Tax suspension regimes, such as Temporary Importation and Inward Processing Relief, offer conditional easements for non-EU means of transport entering the EU. And there are other very restrictive provisions for commercially used means of transport operating in the EU only for ‘the time required for carrying out the transport operations’ under Article 562(b) of the Community Customs Code. But none of these exemptions or suspensions actually caters legally for the modern “commercial” yacht that operates charters in the EU without a VAT paid status. France had realized this and amended its primary VAT and customs legislation in 2004 to reflect its true intentions. Italy has not changed its legislation, but its tacit approval over the years of yachts coming over from France has created an atmosphere fraught with ambiguity and misperception. We have tended to read Italy’s forward and backward steps where Italy was just doing things its way. That way now includes a band of spirited local Prosecutors whose stark view of the law is un-nuanced by the unscripted culture and tolerances of the yachting industry.

“IT’S THE FLAG, STUPID”

Much has been made of the EU maritime cabotage rules and the fact that some of the yachts arrested in Italy fly non-EU flags. But there is no actual evidence that the Guardia is specifically targeting non-EU flags. Instead, they are targeting tax abuse, real or imagined, amidst a severe domestic financial crisis. In an industry where over 95% of the super yachts fly non-EU flags it is statistically obvious why non-EU yachts should fall victim in any sweep.

Of course flag matters, much like any image. A lot, too, remains unclear about the vague EU cabotage rules, despite the European Commission’s assertion in 2003 that most activities of yachts fall outside the scope of these rules. But changing to an EU flag for any reason without structuring the ownership of the yacht to achieve essential EU tax compliance is like taking a placebo. Meanwhile, she may have been doing a two-minded hokey-cokey over the years, but it would be surprising if Italy were to pause now for breath.