Formalities & Expert Assistance
YMCA CAN HELP YOU WITH YOUR SUMMARY TABLE REGARDING THE FRENCH EXCISE EXEMPTION ON FUEL (TICPE)
As you may know, the rules regarding the exemption of the excise on fuel differ whether you are using a transport contract or a charter contract.
When you are using a transport contract you benefit from a complete tax relief on the fuel (VAT + excise).
In contrast, when you are using a normal charter contract, you only benefit from an exemption on VAT if you respect the conditions of the French Commercial Exemption (Articles 262 and 291 of the French tax code).
At the end of the fiscal year, if you have used more duty-free fuel than authorized, you have to keep a summary table including the periods in which you were under a transport contract (and thus eligible to an excise exemption) and the periods in which you were under a normal charter contract (non-eligible for an excise exemption).
This summary table will also state whether you have used taxed or duty-free fuel.
If you have used more duty-free fuel than authorized, this summary table will be sent to French customs who will determine the tax due to them.
YMCA can help you with this process by summarizing all your fuel purchases, filling in the summary table and sending it to customs for you.
If this summary table is not kept and if you have used more duty-free fuel than authorized, customs will be able, in case of investigation, to readjust the excise on the fuel you illegally purchased duty-free. Customs are also able to inflict penalties that may severely increase the total due amount.
It is not too late to send this summary table concerning the year 2018.
Transfer of VAT status from seller to buyer upon the sale of the yacht
The VAT status of the vessel follows the new buyer as a principle. However, there are some caveats that we can solve using the Returned Goods Regime explained later.
Payment of VAT
The importation gives rise to the VAT chargeability. VAT can be requested upon the crossing of the border by the vessel (Article 293 A of the French tax code).
The following schemes are to be considered as a “vessel importation”:
- The entry in France, originating or from a territory which doesn’t belong to the European
Union and which haven’t been released for free circulation.
- Or the release for consumption in France of a good placed under one of the regimes laid down in the Union customs code upon its entry in the European Union territory (regimes such as inward processing, temporary admission…)
The VAT is paid by the person designated as the “real recipient of the vessel” on the importation declaration and recovered by the French Customs.
A customs declaration is established.
Temporary admission for exhibition
According to article 234 of the delegated regulation issued by the European commission on July 28th 2015, a non-EU vessel under temporary admission can benefit from the complete exemption of both VAT and customs tariffs when the vessel is intended to
be exhibited or used in a show opened to the public (for example: boat shows).
Two declarations must be established: a declaration upon the entry into the regime and another upon the exit of that same regime.
A non-EU private registered vessel under temporary admission willing to charter can benefit from a complete tax relief. When the registration flag allows private vessels to engage in commercial activities, the vessel can carry out its commercial activity in France without paying VAT on the hull.
There are two famous flags allowing this specificity:
- The Marshall Islands flag (For yachts over 24 meters)
- The Cayman Islands flag (For yachts over 24 meters)
In these cases, the private yacht can charter for a precise lapse of time. However, the days in which the private vessel is authorized to charter is time-limited. Under a Cayman Island or a Marshall Island registration, it is possible to charter up to 84 days per calendar year.
Tenders and Chase Boats
Tenders which are registered in the list of equipment of the main vessel they follow the regime of the latter.
The chase boats having their own registration can benefit from the Temporary Admission Relief if they fulfill the conditions of that scheme (non-EU flag, non-EU owning company, non-EU resident UBO).
The tender having her own registration cannot be used by EU residents unless the following conditions are fulfilled:
- The main vessel has been formally imported into the European Union
- The tender is mentioned in all the charter contracts
- The tender is exclusively used with the main vessel
- The tender is only used for specific purposes (shuttles to the shore, inaccessibility…)
- A verbal declaration document is filed for the tender after the main vessel is imported.
Temporary importation for works
The inward processing regime allows a non-EU vessel, as a private means of transportation to be repaired, refitted or rearranged in the European Union customs territory without the need to pay any tax or duty.
Importation under French commercial exemption
Any commercial vessel intended to navigate in international waters, willing to provide charter contracts carried out in the European Union waters on a regular basis with a permanent crew, can obtain an authorization from French customs to file a release for consumption declaration with a complete exemption of VAT. The vessel must, however, meet the criteria laid down in the French tax code and in the French taxes information book-BOFIP (Article 262 II 2°, 3°, 6°, 7° and the “BOFIP” dated from the 12 may 2015 at the following paragraphs: 10 to 30 and 140- REF BOI-TVA-CHAMP-30-30-30-10-20150512)
Importation under French reverse charge
VAT reverse Charge is the inversion of the final VAT payer. Normally VAT is paid by the society which realizes the service (or the seller) to the tax authorities.
However, the principle under a customs point of view is a bit different because in our case we talk about importation’s VAT Reverse Charge. Normally, VAT is paid when the merchandise arrives in France to the customs authority. With VAT reverse charge, no VAT is paid on importation. The owning company only needs to write the tax amount on their declaration and deduct it instantly.
Importation under returned good relief procedure
Article 203 of the Union Customs Code
The Union Customs code, on RGR, states that non-Union goods, after being exported as Union goods out of the EU territory, can be reintroduced within three years and declared as goods in free circulation without paying any importation duty.
In order to be eligible to the return goods relief when you come back into EU waters and therefore keep your free-circulation status you will need to meet the following requirements:
- The owner of the vessel should remain unchanged between exportation and next importation into the EU
- The vessel shouldn’t be substantially modified (the vessel can’t be transformed; maintenance and routine works are accepted)
- The vessel should come back into the EU within 3 years after the exportation
Any yacht released for consumption or formally imported into the European union must, when she decides to leave the EU waters, fill out a formal exportation declaration.
All the procedures explained above require the filing of an exportation procedure when leaving French waters.
There are few exceptions:
- There is no need for a formal exportation after entering in the EU under the temporary admission when no other procedure has been used (TAE, TAC…)
- There is no need for a formal exportation when the yacht benefited from the TAE without being obliged to fill a formal importation declaration
If the yacht is not formally exported, it will be more difficult for her to be reimported in the EU the next time she comes. Especially if the yacht is seeking to obtain an advantageous fiscal regime.
Special authorization requested to Customs
The client can ask us to obtain a special authorization from French customs in some particular cases (For example: an authorization for the boat’s owner to sleep onboard during a show where the boat is exhibited).
Oral declaration procedure
According to the article 165 of the of the Union Customs code delegated act, a document accompanying an oral declaration can be established when a private non-EU vessel and owned by a non-EU company entered into the European Union waters and more specifically into the French waters. This document can also be established after a sale in international waters when the boat comes back into the French waters under a non-EU private registry and owned by a non-EU company.
When the newly owned vessel comes back, it can benefit from the temporary admission if the conditions required by the article 212 of the delegated act are respected. An oral declaration shall be filed according to the article 136 of the same act.
Cash-on-board Customs declaration
According to the article 3 (1) of the regulation (CE) n°1889/2005 concerning the relations with the third countries and according to the article 464 of the French customs code concerning the intracommunity relations, there is a declaration obligation when 10 000 euros in cash or more are carried onboard.
This mandatory declaration generally concerns the vessel carrying out a commercial activity and doing charter. These vessels tend to travel with large amounts of cash to pay the Advance provisioning allowance-APA (Fuel, food, drinks).
We can make this declaration and forward it to the customs authorities.
Note that this cash declaration can also be established for a vessel in the Monegasque waters. However, in this case, the declaration must be filed directly by the Monegasque authorities.
Temporary storage facility for vessels
When the boat arrives in French Waters without a determined customs status it is possible to use the warehouse regime.
The warehouse is a customs regime under which the non-union boats can be placed by submitting a customs declaration. They remain monitored by customs on a special quay. The vessels can use this regime awaiting to be imported or placed under a specific regime.
The goods placed under this regime are put into premises pertaining to the operator, to a service provider or someone else (commercial chamber, ports, …).
Temporary admission for sale
Vessels recently launched can benefit from an exemption when they are still owned by the shipyard and want to attend an event in order to be sold. A validation from customs is necessary.
We can clear the spare parts coming from non-EU countries that you may receive, pay the VAT on them and deliver them onboard.
Trade of goods declaration
We can assist you with intracommunity supplies (for example when a yacht is launched in the European Union and intended to be directly delivered in another EU country without prior exportation).