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VAT on full and reduced charters fees: how does it work? June 2016
Is VAT applied to charters in France and Monaco?
Yes, VAT is applied to all charters that start in French and Monegasque waters.
Why is VAT due in Monaco since it’s not part of the EU?
Although Monaco is not part of the EU territory, it is part of the EU Customs, VAT and excise areas.
What is the VAT rate on charters?
Can I pay VAT on reduced fees in case of international voyage?
Yes, you pay VAT at 20% on only 50% of charter fees if the voyage includes high seas whatever the LOA of the yacht is.
When is 20% VAT due on the full fees?
20% VAT is due on static charters (e.g. Cannes Film Festival and the Monaco GP) and on charters that start from a French/ Monegasque port with a cruising itinerary only in French/EU waters. EU waters are those within 12 nautical miles from the mainland and any islands.
When is VAT due only on 50% of the charter fees?
When the charter starts from a French port with a cruising itinerary within and outside EU waters as long as the itinerary hasn’t been determined in advance.
Do I need proof of an international voyage?
Yes, cruising itineraries must be recorded in the logbook as proof of navigation in International waters.
Is VAT due if the charter starts outside French and Monegasque waters?
No, if the charter starts outside France and Monaco, either in an EU or non-EU country, no VAT is due when the yacht enters French/Monegasque waters.
Can EU and non-EU yachts charter in France and/or Monaco?
Yes, but in order to charter there, a yacht must be in free circulation in the EU. This means that the yacht is either EU registered or that it has been imported into the EU or that VAT on the hull has been paid.
How long does it take to be legal to charter?
It takes up to two weeks for an EU company and up to four weeks for a non-EU company. However, as long as you have submitted the required documents and applied for a VAT registration number, you can start chartering before the number has been issued.