Bareboat charters: what you need to know – Marine/Expedition
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Bareboat charter: what is it and what rules should you follow? Here you will find all the useful information.
Bareboat charter: How does bareboat charter work?
The Bareboat Charter represents a form of rental having the particularity of seeing the boat delivered equipped with everything necessary for navigation, in particular fuel, consumables to tackle the trip, etc., but all without a crew.
Generally, bareboat charter is purely for recreational purposes.
The lessee is required, like the owner, to engage the crew and appoint the captain.
This form of rental differs from that where the boat is delivered with crew and captain, previously rented by the owner of the vessel, which is called “fitted and equipped vessel rental”.
The personnel, in the latter case, only temporarily become employees of the lessee, by virtue of the transfer of employment contracts.
According to the usual practice, bareboat chartering is more frequently used, even if very often the apostille is placed in the contract which subordinates the appointment of the captain by the tenant to the agreement of the shipowner.
Bareboat charter: What is the difference between time charter and bareboat charter?
The difference mentioned above between the bareboat charter and the fitted and equipped vessel is not present in the navigation code. Indeed, it is above all the result of custom that sees the first form most used in the commercial field, while the second is typical in the yachting sector.
In both cases, the lessee becomes the owner, who manages the vessel independently, subject to payment to the lessor who makes the vessel available.
The definition of rental is well traceable in article 384 of the navigation code, which also regulates the subcategories of travel and time rental.
Consequently, the lessee of the ship undertakes, against payment of an agreed freight, to carry out with the ship the journeys ordered by the lessee.
The presence of the category “time charter and lease” very often causes confusion when it comes to distinguishing rental from leasing, which is unraveled by the indisputable fact that in the lease there is the delivery of the vessel and the shipowner discharges his charges by delivering him; in the rental, however, the object of the contract is not the ship but the service, or rather the trips to be made, where the boat has only an instrumental function.
Bareboat chartering: tonnage tax regime
There “tonnage tax“represents a tax relief intended for shipowners who can, thanks to the latter, determine on a flat-rate basis the income from economic activities derived from the use of ships, thus eliminating taxation on the income of shipowner companies and subjecting them to a tax at the tonnage.
The option to join the scheme under review must be communicated to the tax authorities within 3 months of the start of the tax period from which the simplified scheme is to be used.
In June 2020, the European Commission approved the extension until the end of 2023 of various Italian measures to support maritime transport under the “International Register” regime.
Through the “International Registry” regime, shipping companies benefit from corporate tax reductions and other benefits.
Following the changes that Italy has committed to invest, the special corporate tax reduction for shipping companies will apply:
- main revenues from maritime transport activities;
- certain ancillary revenue related to maritime transport activities;
- towing and dredging revenues, under certain conditions;
- bareboat charter and time and/or voyage charter activities, subject to a series of conditions.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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