You give to God what belongs to God and to the French Tax authorities what belongs to them, including French Social Security liability. Both God and the French Tax authorities are vengeful if wronged. Your employers are liable to make French Social Security payments if:
Your yacht spends more than six months in French waters in any six months
·You as a crew member are a French resident or domiciled in France.Embed from Getty Images
If you meet those criteria, your employer has to provide evidence that they are making social security payments. Tax authorities the world over do not accept ignorance as an excuse for not paying. Not complying is not an option. Even if the yacht is not French registered, it is liable. And it is not a continuous stay that puts you over the threshold of six months. Non-continuous stays count. This is 183 days. Tout simple.
Like many tax regulations, it is often easy to avoid paying your dues, until inspected. How the French tax people are going to enforce the rules which came into effect in 2017 is not clear. The likelihood is that they will conduct spot checks with punitory fines to deter non-compliance. Avoidance of tax sits in a grey area between civil and criminal codes. If they consider nonpayment is willful and premeditated, a visit to jail may follow – unlikely but nevertheless possible. And the liable party will not be the owner who is protected by SPVs and offshore registration by trusts but rather the yacht management agency who is hired to manage the legalities of yacht ownership.
An employee if in doubt can approach ENIM to declare residence in France and request to pay social security contributions. However, they will not accept any contributions until your employer validates declaration and submits the required information about your employment.
In the case of employment on a yacht flagged in a country with which France has a Bilateral agreement, the UK for example, and you are making social contributions there, you will be entitled to an exemption from French social taxes. Your employer will also need to have an exemption.
Alternatively, you can contribute to private social protection policies that comply with Article L111.1 of the French Social Security Code. This, like most tax codes, is far from straightforward.
One point to remember is that France considers its overseas territories as part of France. Half of St Maarten is French. Likewise St Barts and Guadeloupe.
Clarifications on the application of article L 5551-1of the (French) Transport Code
The regular and continuous length of residency, within the meaning of Article L
5551-1, can be understood by analogy to the rules set out under Article R 111-2 of the
(French) Social Security Code. This condition is met by possessing residence in France or
upon the condition of a principal stay, i.e. an actual period of stay within metropolitan Franceor an overseas department of at least 6 months. This can be proven with any conventionally recognizable document (lease, subscriptions, etc.).
For seafarers who reside on a vessel during their contract(s) and who do not have
their residence in France, this period is calculated based on the presence of the seafarer in
territorial or internal waters for a period of 6 months (assessed on a 12-month basis).
In effect, being a seafarer taken on board foreign-flag vessels does not prevent the
application of the regulations of the country within the waters of the vessel’s location.
It must be an actual stay of more than 6 months, assessed on a rolling 12 months
period. It may be made up of non-continuous stays.
This obligation of subscription to Enim (french public body of social security) or an
insurance policy is required from the day on which the length of stay in territorial waters
reaches 183 days, calculated on a rolling 12 months basis. To subscribe to Enim, the seafarer must certify this by making a sworn statement.
Ship-owners also have the option of subscribing to Enim or insuring a seafarer, under
the conditions of Article L 5551-1, at any point once the expected length of stay is 183 days or more.
At least equivalent insurance:
Social protection, whether provided by a social security body or private insurance,
must cover all the branches set out in the aforementioned Article L 111-1 of the (French)
Social Security Code . As a minimum, it must provide cover for the seafarer’s healthcare costs
and their beneficiaries, compensatory salary allowances in the event of illness or accident
(whether work-related or not), permanent disability compensation and old-age benefits
including reversionary pension and family allowances particularly for child maintenance and
Arrangements for subscription to an insurance scheme:
This obligation may be assumed in full or part by the seafarer, subject to the
obligations concerning certain costs assumed by ship-owners.
For vessels undergoing maintenance:
This measure applies to vessels that are subject to standard operations within the
scope of their activity, and does not concern vessels undergoing maintenance.
Therefore, maintenance periods that render the vessel inoperable or periods spent in a
naval shipyard, including periods before and after the maintenance work in the shipyard, are
excluded from the calculation for the obligation arising from Article L5551-1 of the (French)
Clarifications concerning the means of subscribing to Enim:
To make the process easier for employers who might decide to subscribe their
employees to Enim, all the necessary documents will be translated into English on the Enim
website, the subscription procedure will be simplified and a reporting tool for the seafarer’s
services will be made available online