Two days before the charter, the management company transfers EUR 60,000 into the yacht's account and the captain tells you that you are running the APA. That money is not the yacht's, and it is not the owner's. It belongs to the charter guest, and every euro of it will be accounted for to them, in writing, at the end of the week.
How a Charter Works Financially
| Element | What it is | Who handles it |
|---|---|---|
| Charter fee | The price of hiring the yacht for the period | Broker to owning company |
| APA | Advance Provisioning Allowance — the guest's running-cost fund | Captain / purser / chief steward(ess) |
| Delivery / redelivery fee | Cost of positioning the yacht to and from the agreed ports | Contract-specific, usually invoiced separately |
| VAT / taxes | Depends entirely on jurisdiction, flag and structure | Broker, management company, accountants |
| Gratuity | Customary, discretionary, paid at the guest's choice | Captain, per the yacht's policy |
The APA
The Advance Provisioning Allowance is a sum paid in advance by the charterer to cover the yacht's running costs during their charter. It is commonly around 30% of the charter fee, with 25–35% typical, and it is set in the charter agreement, not by the crew.
Worked example. Charter fee EUR 200,000 for the week; APA at 30%:
200,000 × 0.30 = EUR 60,000
What the APA Covers — and Does Not
| Typically covered by the APA | Typically not covered |
|---|---|
| Fuel for the yacht, tenders and toys | Crew wages |
| Dockage, port dues, pilots, agency fees | Yacht insurance |
| Food and beverage for the guests | Routine maintenance and yard work |
| Flowers, laundry, guest supplies | The owner's own provisions and items |
| Guest requests: restaurants, transfers, excursions | The charter fee itself |
| Communications used by guests | The gratuity |
Gratuities
A gratuity is customary but entirely discretionary. Common guidance in the market suggests something in the region of 5–15% of the charter fee, often cited around 10%, but it is the guest's decision alone and it is never an entitlement, never invoiced, and never taken from the APA. On a EUR 200,000 charter fee, 10% would be EUR 20,000 — a figure you never mention to a guest.
VAT and Tax — Not Your Call
Charter VAT, cruising taxes, fuel duty and import status vary by jurisdiction, flag and charter structure, and the treatment can change between two ports in the same week. Your responsibility is to obtain valid tax receipts, record the spend accurately, and pass the question to the broker and management company. Never tell a guest what the tax position is.
Onboard Notes
- APA money is the guest's money held in trust. It is not a buffer for owner-side costs, and it is not a slush fund.
- Do not spend against an APA that has not actually cleared. Confirm receipt of funds with the captain first.
- This is general professional guidance; nothing here is tax or legal advice.