Book your French Riviera Yacht Charter before July 15th and pay NO VAT
ECPY (European Committee for Professional Yachting) have announced that after many months of deliberation, the French Authorities have decided to amend French VAT legislation and to enforce French VAT rate on all charters commencing in French waters where the charter contracts are signed after 15th July, 2013.
ECPY’s president said that, although charters would be charged at a rate of 19.6%, they would actually be subject to an effective rate of 9.8%, qualifying for a 50% reduction, in line with the French reforms.
This reduction of 50% on the standard VAT rate is based on Article 59a of the EU Directive, which governs the use and enjoyment rules for yachts capable of international travel. It is believed that the standard rate of TVA will soon increase to 20%, resulting in a tax rate of 10% on charters commencing in French waters.
We understand the French and EU Authorities are still discussing how to define ‘for international travel’ and ‘high seas’, which will be a long and drawn out process. In the meantime, the French will continue interpreting Article 262 as it stands and carry on with zero rating the supply of goods and services to commercial charter yachts, including fuel.
The enforcement of this amendment to the French VAT legislation will not apply to charters booked prior to July 15th, 2013.