25% Additional Custom Tax on US Built Yachts - What's going on?
We would like to remind you that the additional tax imposed on US built yachts implemented by the European Union is applicable in all European Union countries.
This tax is the European Union’s response to the US’ enforced taxes on steel and aluminum. The decision to impose this additional tax was taken on the 22nd of June 2018 (règlement d’exécution UE 2018/724 & 2018/886).
ECPY has been in negotiation with the French Customs Service since the summer of 2018 and the negotiation is still in progress. Nevertheless, we consider it important to keep you updated on the on-going discussion.
You’ll find below the outcome of the discussions and the topics that are still being addressed. This information has been officially received and confirmed in writing.
Where we are after 6 months of negotiation
For privately registered yachts that are solely for private use (no commercial use), the situation remains unchanged from how it has been before 22nd June 2018. These vessels can benefit from the “Temporary Admission” as long as they comply with the requirements of Article 212 of 28th July 2015 regulations. They can cruise/stay in European waters for up to 18 months without being liable to VAT on the value of the yacht.
For yachts operating under the YET scheme, these are privately registered yachts that are authorised to engage in charter for a given period, (this scheme is offered by certain Flag States), the occasional commercial use of the yacht can be allowed without being liable to pay the additional customs tax. The Customs’ requirements for this status are still not clear. We are waiting for an answer regarding the possibility for the Customs to request a bank warranty/security deposit for the additional tax.
Can commercially registered yachts benefit from the “Temporary Admission” available to commercial vessels? It is possible to place commercially registered yachts engaged in charter operations under the “Temporary Admission” status and then import the yachts without paying the additional customs tax. However, the Custom Authorities have emphasised that in such circumstances, the yachts must leave EU waters at the end of the charter period and before a new charter starts. This means that at the end of the charter the yacht must return to Tunisia, Montenegro or Gibraltar.
For tenders that have their own registrations and are built in the US, we have requested clarifications to know under which formalities these tenders will be imported, and if they will be eligible to benefit from the “Temporary Admission” status.
Coming up …
ECPY will continue negotiations with the assistance of our lawyers in order to obtain clarifications on the application of the enforced additional tax.
Our objectives are:
To obtain the non application of a bank warranty/security deposit when under the YET regime
To obtain a clear interpretation on the rules that allow US built vessels to enter into French waters
We will keep you updated about the outcome. If you need further clarifications, feel free to reach out at email@example.com.
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