Case study · Tax
Recovering input VAT on the acquisition of a motor cruiser
We analysed the commercial use and documentary record of a newly acquired motor cruiser to support the recovery of input VAT and establish a robust compliance framework.
The acquisition involved a company, overseas suppliers and a planned charter activity in Spanish waters.
The central issue was not the asset alone, but whether the facts, contracts and ongoing use demonstrated a genuine taxable business activity.
The challenge
- Mixed legal, operational and tax documentation.
- Evidence of intended and actual commercial use.
- Cross-border invoicing and place-of-supply questions.
- Ongoing controls for private use and operating costs.
Our approach
Technical precision, focused on the client.
Evidence before assertion
We reviewed contracts, registration, marketing, bookings, management arrangements and financial projections as one evidential file.
Technical analysis
The VAT treatment of acquisition, charter activity and related services was documented with the relevant Spanish and EU rules.
Continuing compliance
We established record-keeping and review procedures so that later use remained consistent with the recovery position.
The outcome
The company submitted a supported recovery position based on the commercial facts and a coherent documentary record.
It also gained a practical compliance protocol for invoicing, operating expenditure and any non-business use of the vessel.
VAT recovery depends on the reality of the activity and the quality of the evidence, not simply on the form of ownership.
The Lullius approach
