The French have taken their time to make the announcement, but now it's official. If you charter a yacht in France from now on you will have to be VAT on the charter.
Sailing in France - the good (read cheap) times have gone
Little more than two months after Sail-World published a http://www.sail-world.com/cruising/usa/No-VAT-French-charter-yachts-until-EU-decides/108645!story about the competitiveness of yacht charter in France because of the lack of a VAT charge, it has been suddenly brought in, with a mere 15 days notice to the industry.
The French tax authority has informed the European Committee for Professional Yachting that it plans to levy a value-added tax on yacht charters starting July 15, 2013. The announcement comes after the European Commission sent a formal request to France in November requiring the government to revoke a VAT exemption on yacht charters.
The Commission told the French that member states are not allowed to offer exemptions on luxury boats used for recreational purposes.
However, it has been reported by www.tax-news.com, the French government plans to offer a 50 per cent VAT reduction to current charters that are impacted by the ruling. That would subject them to a VAT rate of 9.8 per cent, rather than the headline rate of 19.6 per cent.
French tax authorities said they would provide further guidance in due course, but that the preliminary rules are outlined in the document, 'BOI-VAT-FIELD-30-30-30-10-20130625'.