Sarnia Yachts

Yachts registered as Commercial and used in French waters may be considered VAT exempt providing they comply with the regulations announced in May 2004. These yachts may only be used for this purpose with a permanent crew, a charter contract in place and evidence of a realistic charter fee having been paid. Mixed commercial and pleasure use is not permitted. A beneficial owner may charter his/her yacht, but excessive use may be interpreted as Demise Charter and contrary to the rules.

In summary, provided the yacht is:

-  Permanently available for ‘high seas’ charter
-  Fully provisioned
-  Permanently crewed
-  Commercially registered

then one may not need to be concerned with VAT on charter fees or hull value when operating in French waters. Just remember, the FCE only applies to France and is not authorised in any other EU member state.

It should be noted that the FCE rules are currently under review by the EU Commission and yachts currently operating under these rules might be wise to consider how they will operate should the exemption come to an end. We can help any owner wishing to discuss the available options.

 Please contact us for further details