We return to the VAT subject from July. We previously informed our readers about the new French VAT regulations on yacht charters. The VAT applies to yacht charters in France.
New regulations exist. The new regulations apply from 15 July 2013 to charter agreements for yachts for the purposes of leisure travel.
First, question #1: What rate will apply to French charters after 15 July?
“The rate has been set at 19.6% and will increase to 20% on January 1, 2014. However, the taxable base can be reduced by 50% if the yacht is used outside European Union territorial waters, which by definition extend out 12 nautical miles from the coastline. Thus, if you started a charter in Nice, France, and cruised out beyond the 12 nm limit, and concluded the trip the next day in Sardinia, the tax would drop to 9.8%.”
Second, question # 2. Does it apply if the charter starts and ends outside France?
“No. The law reads VAT is applicable on the charter if the vessel is put, ‘…at the disposal of the charterer in French waters.'”
Third, question #3. Will charterers need to be involved with VAT registration and compliance in France?
“Not at all. It is the responsibility of the yacht owner to make the necessary arrangements to register his or her vessel with the French taxing authorities. As to the collection and processing of the tax, most owners are hiring local French-based fiscal agents.”
“As charter consultants, our responsibility is to clearly explain the new regulations to our clients. Many are repeat charterers who cruised multiple times in France in the past. For some, it will be a shock to hear their next Western Mediterranean yacht charter vacation may be subject to a tax of nearly 20%. We will work with them to modify their itineraries, in an effort to mitigate as much of the tax liability as possible.”
HAVE A QUESTION ABOUT VAT?
Drop us an email at info@1800yachtcharters.com, and we will respond right away.
France’s efforts to seek an exemption from VAT on yacht rentals has failed, and starting July 15, 2013, charterers can expect to pay an additional 9.8% for their Côte d’Azur yacht charter.
For years, the majority of Mediterranean yacht charter vessels based in France were registered as commercial vessels. This is a strategy that allows their owners to sidestep VAT on the purchase of fuel and on the prices charged for charters. The European Union prevailed in court to force France to follow EU VAT guidelines. Beginning July 15, charters are subject to the nearly 10% fee.
Jana Sheeder, President of 1-800 Yacht Charters and SailAway Yacht Charter Consultants, Inc. is working closely with her preferred clients. She explains the new fees and to explore alternative destinations where the VAT fees are lower or even not applicable.
Sheeder says,
“We are investigating other countries in the European Union as alternative Mediterranean yacht charter destinations. Gibraltar, for example, has no import duty for yachts over 18 meters – and no VAT.”
LUXURY TAX ABOLISHED The recent Mediterranean Yacht Charter show in Genoa, Italy, learned that the 3 year old Sardinia Luxury Tax is no more. ABOUT THE TAX The repeal of the Sardinia Luxury Tax is especially good news to charter enthusiasts. Anyone considering a yachting vacation in the Mediterranean is fortunate. The law […] read more
The world of luxury yacht charter has finally arrived in the Seychelles. Motor yacht SEA STREAM, a 76 foot Ferretti with room for 8 guests, is now available for Caribbean yacht charter enthusiasts looking for a new destination. Ferretti yacht SEA STREAM is now available as the only high quality, luxury crewed motor yacht available […] read more
PLAN AND PACK Yikes! What to pack? In just over three weeks, you leave on a week-long Bahama yacht charter vacation. You choose a sleek, performance, basic sailing yacht with crew. Your menu provided to your yacht through your charter broker, and your crew is ready to welcome you aboard. Seriously, what do you pack? […] read more
Recent Comments