Description
The regulation arising from this European provision applies differently in France and in Italy.
In France:
There are 2 fiscal categories of yachts:
- “High Sea yachts” which benefit from VAT exemption (and therefore do not pay VAT on services or supplies or on the value of the yacht)
- “Coastal yachts” which do not benefit from VAT exemption and fall within the general VAT regime (payment of VAT on services and supplies and on the value of the yacht followed by recovery)
The legislator introduced the concept of trip to determine whether the yacht enters into the high sea category (exemption regime) or coastal category (general regime, taxation, recovery).
“The term “trip” means any commercial navigation made between two ports situated in national, EU or international waters, and specifically where loading/unloading of merchandise and/or embarkation/disembarkation of passengers occur.” [BOI-TVA-CHAMP-30-30-30-10]
When, during the course of a calendar year (1 January to 31 December), the yacht reaches 70% or more of qualifying trips, it is classed as a high sea vessel (exemption from VAT). If it does not reach 70% qualifying trips , it is classed as a coastal vessel (general regime of payment followed by recovery of VAT).
FLYN-YACHTING will calculate the percentage of qualifying trips made throughout the year, with a report sent at the end of each navigation, to the decision maker (shipowner, captain, manager) who can thus permanently check the situation with regards to the tax in question. At the end of the year, FLYN-YACHTING will issue (in the case of a premium package) a certificate indicating the percentage of qualifying/nonqualifying trips, which will indicate which tax regime will be applied to the yacht during the following year.
Consequences:
- In the case of a ratio lower than 70 % in year N-1 the yacht will be classed as a coastal yacht for year N and during year N must pay VAT on suppliers invoices and on the value of the yacht if this has not been done previously; applications for refunds from the tax departments will need to be made in order to obtain a refund for the VAT paid.
- In the case of a ratio equal to or greater than 70 % in year N-1, the yacht will issue a certificate of commercial activity which will enable it to benefit from exemption throughout year N.
In Italy
In Italy the two categories of yachts: “high sea” and “coastal” exist, as they do in France, the difference is found in the definition of the trip and in the threshold of the ratio which must be greater than 70%.
There is only one trip per commercial operation: the disembarkation or embarkation of passengers during the charter are not taken into account. When, over a calendar year (1 January to 31 December, the yacht reaches over 70% of qualifying trips, it is classed as a high sea vessel (exemption from VAT). Otherwise, it is classed as a coastal vessel (general regime of payment followed by recovery of VAT).
FLYN-YACHTING will calculate the percentage of qualifying trips made throughout the year, with a report sent at the end of each navigation, to the decision maker (shipowner, captain, manager) who can thus permanently check the situation with regards to the tax in question. At the end of the year, FLYN-YACHTING will issue (in the case of a premium package) a certificate indicating the percentage of qualifying/nonqualifying trips, which will indicate which tax regime will be applied to the yacht during the following year.
Consequences:
- In the case of a ratio lower than 70 % in year N-1 the yacht will be classed as a coastal yacht for year N and during year N must pay VAT on suppliers invoices and on the value of the yacht if this has not been done previously; applications for refunds from the tax departments will need to be made in order to obtain a refund for the VAT paid.
- • In the case of a ratio greater than 70 % in year N-1 the yacht will issue a certificate of commercial activity which will enable it to benefit from exemption throughout year N.
