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NEW VAT RULES ON SHORT AND LONG TERM CHARTERS IN FRANCE

On December 4th 2020, the French tax authorities published a new Tax Circular (BOI-TVA-CHAMP-20-50-30-04/12/2020).

It has replaced the previous Tax circular regarding the VAT calculation applicable for charters, starting from France. The 50% relief is over!

New rules:

All charters/long term leases starting in France are subject to the ordinary VAT rate of 20%.

Same as in Italy, time and not distance shall be taken into account to evaluate the reduction of the taxable basis on the charter hire/lease during the course of a charter/long term lease, based on the time spent outside of EU waters.

The effective use of a vessel under charter/long term lease agreement outside of EU waters is not subject to VAT.

Evaluation of the time spent outside EU Waters will have to be proven by all possible means. For those vessels equipped with AIS, AIS data shall be the main mean of proof accepted by the Administration. For vessels not equipped with AIS and vessels with an LOA <15 Meters, the calculation will be based on any technical data the vessel can provide in addition to the contract and logbook entries. The new measures apply to all charters/leases signed after 1 November 2020. WES (World Express Services) will advise you on all the necessary steps to follow regarding this significant change in policy to the yachting industry and local economy.
yachting@wes.mc Phone : +377 97 98 79 98 – + 33 6 64 26 47 47 https://www.wes.fr/en/yachting/

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