COVID 19: CONSEQUENCES ON THE CUSTOMS AND VAT STATUS OF YACHTS AND GOOD NEWS COMING FROM FRANCE
With many of you currently wondering whether they should, or not, bring their yachts back into the European Union for the 2020 season, we are delighted to provide some helpful information on certain topics.
First of all, what will happen to your customs status if your yacht does not enter in the European Union until 2021?
For yachts previously imported under the French commercial exemption, the main criteria is to respect the 70% rule every calendar year. This means that 70% of the trips executed under a commercial certificate of registry must be done fully or partially outside of French waters. Therefore, if you are currently outside of the European Union and not able to come back to the European Union this year, we suggest that you arrange at least one charter under commercial certificate of registry. This should enable the return of the yacht in 2021 under the French commercial exemption.
For yachts previously imported under the French reverse charge, our advise would also be to execute at least one charter under a commercial registration during the year 2020.
Regarding US-built yachts, they will be able to benefit from the returned goods relief (exemption on the 25% customs additional duty) as long as they haven’t left EU waters for more than 3 years in a row and that the ownership is unchanged since the last exportation from Europe. However, please note that US-built yachts whose previous regime (before the application of the returned goods relief) was the French commercial exemption are still required to respect the 70% rule every year in order to keep the benefit of the VAT exemption. For these yachts, we, therefore, recommend executing at least one charter under a commercial certificate of registry.
We are hoping that the nautical activities will be resumed in France not later than mid-July 2020 (We can’t of course guarantee this).
There are, though, some very good reasons to charter in France during the coming season. First, regarding VAT, the French authorities have finally postponed their restrictive regulation and allowed the VAT lump-sum reduction. It means that the effective rate of charters starting from France and crossing international waters (albeit briefly) will continue to be 10% (as in the previous seasons). Until further notice.
Moreover, regarding the seaweed, in concrete terms, while the maritime authorities will probably be forced to postpone the implementation of restrictions on anchorages in Posidonia areas (vessel over 24 meters), the profession is committed to ensuring that these measures are applied by professionals as of the 2020 season, without waiting for official decrees, based on the discussions that took place at the end of 2019, and on the trends already underway in this direction for over two years by the assumption of environmental responsibilities by ship owners and captains.
To do this, the signatories will distribute to all professionals (Provence Alpes Côte d’Azur) the cartographic elements planned by the authorities (with translation into English) allowing captains to better choose their anchorage points, in the respect of the Posidonia areas, with the recommendations and mention of the associated tools (Medtrix, Donia).
Also, it is currently possible to enter a French port provided that the yacht has a long-term mooring contract with the latter (3 month term contract at least).
Do not hesitate to contact us but most importantly stay safe,
Very best regards,
The YMCA-YACHTING team
T: +33 (0) 492 004 390
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