What are the benefits of the French Commercial Exemption (FCE) on VAT?

Jan. 3, 2019 |  Customs & Tax - Blog - 



 

The process is fast and easy. With the FCE, you can benefit from the VAT exemption on the Hull.

You can also benefit from the exemption on the purchase of equipment, works, services, alcohol, tobacco and fuel.

The conditions to benefit from the FCE are the following:

  • The overall length must be over 15 meters
  • The yacht must be registered as commercial
  • The yacht owning company must employ a permanent crew.
  • The yacht must be used exclusively for commercial purposes (for example, under a charter agreement).
  • 70% of the trips must be done outside the French waters.

Any vessel, under a commercial certificate of registry and expecting to make charters with a permanent crew in EU waters, can be authorized by French customs to be imported with a complete VAT relief.

The first year that the owning company claims the benefit of the FCE, they will need a provisional commercial activity certificate to ensure that the yacht will comply with the 70% rule during the current year (N). If the rule is not respected, VAT will be readjusted by French Customs based on the value of the vessel.

If the yacht complies with the 70% rule, she will automatically be granted a permanent certificate of commercial activity for the next year. If during this “next year” (N+1) the 70% rule is not respected, the VAT won’t be readjusted for that same year. The only consequence will be that the yacht won’t benefit from the VAT exemption for the year after (N+1).


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