VAT is taxable in France only if the provider is established in France or has an establishment or its domicile in France except distance selling.

Vat yacht france. Just because VAT has been paid historically this doesnt mean the yacht is always able to sail in the EU condition-free. New VAT provisions in the yachting sector Disappearance of the 50 reduction An official bulletin of the French Administration 01272020 has just amended certain VAT rules applicable to the yachting sector which will enter into force from 30 March 2020. What is the VAT status of the boat.

All privately owned vessels used by EU residents within the EU are required to pay a Value Added Tax VAT which can add a hefty 20 percent to your sales price. The rules are different for non-EU residents who are permitted to use private yachts in the Mediterranean under Temporary Admission for up to 18 months without being liable to pay VAT on the hull. French Customs officials have informed a visiting cruiser that France does not permit the 18 month period of Temporary Importation TI to be extended.

2 One should undertake robust pre-purchase tax due diligence on any yacht but particularly if the yacht is marketed as VAT paid. The French Tax Authorities surprised the whole yachting industry in France by publishing a new tax bulletin last Friday with retroactive effect from 1 November which affects the way VAT on short and long term chartersleases is calculated. Article 262-II-2o 3o 6o and 7o and Article 291-II-5o of the French Tax Code until then applicable only to merchant ships were extended to assimilate yachts earmarked for commercial charters.

VAT on boats when buying second-hand The Association of Brokers and Yacht Agents ABYA recommends that its members should obtain the relevant paperwork from the vendor before listing a yacht as being VAT paid. The 70 relates to the yachts commercial exempt status while the 50 allowance on the taxable basis concerns VAT on charters starting in French and Monaco waters. VAT on yachts is a broad subject and each EU country has subtle differences in how VAT is looked upon although the treatment should be the same throughout the EU.

For yachts built after 1 January 1985 the VAT should have been paid by the initial purchaser or importer. Boat owners are being advised by Her Majestys Revenue and Customs HMRC to carry evidence of VAT status. VAT on charter rules remained unchanged.

One of the many reasons why a buyer might consider engaging the services of a broker as well. If the yacht is advertised as VAT paid it is important to request documentary evidence of this from the seller or their broker. Upcoming changes on VAT treatment of French yacht charters in 2021.