When planning a yacht charter in the south of France, one important factor to consider is the application of Value Added Tax (VAT). In France, VAT is a tax on goods and services that is currently set at a standard rate of 20%. However, there are some exceptions and rules that apply to the calculation of VAT on yacht charters, particularly when it comes to the time spent in international waters.
The first thing to understand is that VAT is typically applied to the charter fee of the yacht. This means that if you charter a yacht for €10,000, you will need to pay an additional €2,000 in VAT at the standard rate of 20%. However, this applies only if the yacht is being used for private purposes while in EU waters.
If you plan to spend time in international waters during your yacht charter, the calculation of VAT can become more complex. The rules regarding VAT on yacht charters are designed to ensure that yacht owners and charterers are not able to avoid paying VAT by simply sailing in and out of EU waters.
The basic rule is that VAT is only applicable when a yacht is used within EU waters. This means that if you spend more than 50% of your time in international waters during your yacht charter, you may be eligible for a reduction or exemption from VAT.
However, it is important to note that the calculation of time spent in international waters can be complex and may require documentation and records of your yacht’s movements. It is therefore recommended that you work with a reputable charter company and seek professional advice to ensure that you are complying with all VAT regulations.
It is also worth noting that if a yacht is used for commercial purposes, such as a charter business, then a reduced rate of VAT of 10% may apply. However, this only applies if the yacht is licensed to operate as a commercial vessel and is used primarily for commercial purposes.
In conclusion, the calculation of VAT on yacht charters in the south of France can be complex, particularly when it comes to the time spent in international waters. It is important to work with a reputable charter company and seek professional advice to ensure that you are complying with all VAT regulations and that your yacht charter is a success. By understanding the rules and exemptions regarding VAT on yacht charters, you can ensure that you are prepared for any additional costs and that your charter is a memorable and enjoyable experience.
When applicable The S Collection uses a Yacht VAT Calculator to ensure that our clients don’t pay more VAT than they should and remain fully compliant with the law.