Update on Additional Custom Tax on US Built Yachts

Since ECPY's announcement last week concerning the additional 25% Custom Tax on US built yachts, the situation has significantly evolved.

On 26 March 2019, the customs services provided details that fundamentally change the situation for yachts in commercial use - subject to the use of a charter or transport contract - but these changes do not apply to yachts in private use.

New Customs Tax Regulations

Commercial use:

The new Customs Code defines 'commercial use' as a means of transport for the purposes of transport; this means that a charter which is a rental cannot be considered as 'commercial use'.

The Return of the Goods Relief Provision Regime:

The additional customs duties of 25% are not applicable to vessels which were in free circulation in Europe before the entry into force of the new regulation.

This means that if a yacht imported before 22 June 2018 subsequently returns to Europe, it will not have to pay additional customs duties at 25% on its return to Europe. This is a fundamental change.

Note: A yacht that has never been imported will not be eligible for exemption from the additional 25% customs duties.

New Regulation for Charter and Transport Contracts

Charter contract:

Private yachts placed under the status of 'temporary admission for private use' can be offered for charter (provided that their flag allows charter use under private registration). However they must designate a fiscal representative and pay VAT on the charter fees as before.

Note 1: This regulation will replace the 'YET' procedure as it will no longer be of any use

Note 2: It has to be confirmed if European passengers/clients can embark in European waters.

Commercial registered yachts:

A charter will no longer be considered as a commercial activity; these yachts will be placed under the status of 'temporary admission for commercial use'. They must remain outside European waters, only entering European waters for the duration of the charter, and they must leave immediately after the charter.

Transport contract:

Commercial registered yachts wishing to use a transport contract must be placed under the 'temporary commercial admission' status for the period of the contract and must leave European waters at the end of the contract or be placed under another customs procedure.

Note: All vessels using a transport contract can embark European clients as well as non-European clients in European waters.

Concerning Tenders and Chase Boats

Tenders that have their own registration will have to be placed under the same 'temporary admission' as the main yacht. For tenders that do not have their own registration and are listed on the yacht's equipment list are covered by the 'temporary admission' status of the main ship.

These regulations will significantly change the current rules. We had less than 24 hours to review the documents provided by customs and we are still waiting for their response. We are sure of all the points made above, although several points have yet to be confirmed. We await an appointment with customs for clarification.

If you'd like further information, don’t hesitate to reach out to info@ecpy.org or contact Thierry Voisin at president@ecpy.org - currently en route to the Palm Beach Yacht Show.