French Anticipate Amendments to VAT Rules
The European Committee for Professional Yachting (ECPY) has received confirmation from Direction de la Législation Fiscale (DLF) of changes to VAT rules, which will come into effect from July 15th 2013.
The ECPY acknowledge that the French economic authority are anticipating an upcoming decision from the European Commission on the suggestions it put forward for VAT exemption requirements, by altering current French VAT regulations. Accordingly, from July 15th, all luxury yacht charters will be subject to VAT charged at the national rate of 19.6%.
Thierry Voisin, ECPY’s president, commented on this news saying that although super yacht charters would be charged VAT at 19.6%, they would in reality only be subject to a rate of 9.8%, being eligible for a 50% curtailment, which stands in line with the French reforms. The details of exactly what would make a yacht charter eligible for this 50% reduction are unclear at this time but, as understood by Voisin, “at the moment, there are no requirements... If you make a charter (after July 15th) you get a 50% reduction”.
Voisin did comment that, as far as he knows, the reduction was granted on the stipulation that some of the charter takes place beyond French territorial waters, or 12 nautical miles from the shore. This however seems to be ambiguous, given the desire for many superyacht charters in the French Riviera to centre on and around the coastline.
Essentially, as was predicted at the Superyacht Fiscal Management Meeting in March in Brussels, any yacht charters booked before July 15th will qualify for VAT exemption according to historic French legislation.
It is known for sure that the change will come into effect on July 15th, but how they will enforce it is yet to become clear.
An official statement from DLF is still in the works.
Yachts that are currently available for charter in the French Riviera include the 163 metre Blohm & Voss superyacht Eclipse, the 99 metre Canadian Vickers charter yacht Christina O and the 88 metre sailing superyacht Maltese Falcon.
What we know for now is that it will change on 15 July. How they enforce it will become clearer with the full instructions - Thierry Voisin