The European Committee for Professional Yachting (ECPY) has said that it has received confirmation from Direction de la Législation Fiscale (DLF) of amendments to VAT rules, which will come into force on 15 July.
According to ECPY, the French fiscal authority has pre-empted the impending decision from the European Commission on proposals it put forward for VAT exemption requirements, by amending existing French VAT legislation. Therefore, from 15 July all superyacht charters will be subject to VAT charged at the national rate of 19.6 per cent.
ECPY’s president, Thierry Voisin spoke exclusively to SuperyachtNews.com upon receiving the news. Voisin said that, although charters would be charged at a rate of 19.6 per cent, they would actually be subject to an effective rate of 9.8 per cent, qualifying for a 50 per cent reduction, in line with the French reforms.
The details of what would qualify a charter for a 50 per cent reduction are currently unclear but Voisin asserted, “at the moment, there are no requirements”. “If you make a charter [after 15 July] you get a 50 per cent reduction”, he said.
Significantly, as predicted at the Superyacht Fiscal Management Meeting in Brussels in March, charters booked before 15 July will qualify for VAT exemption, in line with historic French rules.
“What we know for now is that it will change on 15 July. How they enforce it will become clearer with the full instructions”, Voisin said.
An official statement from DLF is still pending, and SuperyachtNews.com will provide confirmation of these changes when they are issued.
According to ECPY, the French fiscal authority has pre-empted the impending decision from the European Commission on proposals it put forward for VAT exemption requirements, by amending existing French VAT legislation. Therefore, from 15 July all superyacht charters will be subject to VAT charged at the national rate of 19.6 per cent.
ECPY’s president, Thierry Voisin spoke exclusively to SuperyachtNews.com upon receiving the news. Voisin said that, although charters would be charged at a rate of 19.6 per cent, they would actually be subject to an effective rate of 9.8 per cent, qualifying for a 50 per cent reduction, in line with the French reforms.
The details of what would qualify a charter for a 50 per cent reduction are currently unclear but Voisin asserted, “at the moment, there are no requirements”. “If you make a charter [after 15 July] you get a 50 per cent reduction”, he said.
Will favourable tax rules trigger a flurry of French charter uptake prior to the 15 July watershed?
Voisin did clarify that, as far as he was aware the reduction was granted on the proviso that a portion of the charter was undertaken beyond French territorial waters, or 12 nautical miles from shore. This would seem to be problematic, given the propensity for superyacht charters in the French Riviera to focus their activity on and around the coastline. “They will apply a 50 per cent reduction, bearing in mind that the boat will have to spend 50 per cent of its time out of territorial waters but this is currently an [arbitrary] figure.”Significantly, as predicted at the Superyacht Fiscal Management Meeting in Brussels in March, charters booked before 15 July will qualify for VAT exemption, in line with historic French rules.
“What we know for now is that it will change on 15 July. How they enforce it will become clearer with the full instructions”, Voisin said.
An official statement from DLF is still pending, and SuperyachtNews.com will provide confirmation of these changes when they are issued.
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