The end of French Commercial Exemption on yacht charter
On the 25th June 2013, the French fiscal authorities heralded the end of the French commercial exemption on yacht charter via an official bulletin.
Further to the ruling on the BACINO case the EU Commission asked the French Government to respect the EU VAT rules and to fall in line with other EU countries like Italy, who have been implementing VAT on the charter rate since 2012. The result is that for all charter contracts commencing in French waters and signed after the 15th July 2013 VAT shall be applicable on the charter fee at 19.6%.
The VAT rate in France currently stands at 19.6% and we have been informed that there will be a possible rebate of 50% for yachts cruising in international waters, effectively reducing the VAT rate to 9.8%. The application of this reduced rate is still to be confirmed.
As of the 15th July, all vessels starting a charter in France will need to be VAT registered in France.
For further information regarding this please don’t hesitate to get in touch with our Charter Marketing Division here.