An official French tax announcement published on 30th January 2020 by the French Tax Authority has defined the new VAT rules applicable to charter contracts starting from France. The lump sum reduction rule formally applied in 2019 has now been cancelled and the new rule states that VAT will be charged at full rate (20%) while the yacht is in EU waters, and no VAT is applicable while in international or non-EU waters.
Charter contracts starting from France signed before 30th March 2020 will not be subjected to the new rule, with the lump sum reduction rule still applicable. Evidence of date of signature will be requested.
Means of Proof
Data recorded from an automatic identification system (AIS) cannot be challenged by tax authorities. Such evidence is considered as conclusive proof unless there is fraud involving the system itself.
Please note that at this stage this is a public consultation, meaning changes could be made to the text up to 1st March 2020 but in the meantime, the current proposal is applicable.
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