Increase in French Yacht Registrations Immediately Preceding FCE Expiration
The French Commercial Exemption (FCE) from the EU VAT tax is no longer in effect following its July 15th expiration this past month.
Superyacht industry website Medberths reports a brief spike in registrations immediately preceding the July 15th deadline, "It seems that this led to a flood of bookings before the cut-off date as most sought to avoid paying VAT by booking charters before 15th July, so the real impact on the local economies will only be fully seen next season."
The article continues:
Thierry Voisin, president of the European Committee for Professional Yachting (ECPY), has issued a statement indicating that a 50% reduction will be applied to the applicable VAT, making for a 9.8% tax. Voisin has made the industry aware that the VAT rate will be increased to 20% in the near future.
'The introduction of French VAT on commercial yachts will certainly send waves through our industry,' says Ocean Independence Charter Broker Frances Edgeworth, 'people are possibly going to try to negotiate the charter rate down to balance out the new VAT against the current charter rates advertised. So it is going to impact on all industry members including charter brokers, the yacht owners and crew.'
Edgeworth estimates that yacht owners will be required to pay a minimum of around 2,500 euros initially for a fiscal representative (to apply for a VAT number and to collect the VAT), plus approximately 500 euros per charter contract.
The charter industry is now waiting anxiously to see whether other areas will be subject to VAT, including charter commissions, fuel and provisions.
Whilst this is undoubtedly bad news for the companies affected but combined with Spain’s recent announcement concerning Matriculation Tax, it could lead to a more coherent and balanced charter industry in the entire Mediterranean and reduce congestion in the “Golden Triangle”.
These issues are sure to be discussed at Marine Money's 6th Annual Superyacht Finance Forum this September. For more information on the event, visit www.marinemoney.com.
