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New Concerns about VAT on Charters in France

Clients are confused, and charter yacht brokers are sorting out the changes

Yachting industry insiders are raising new concerns about possible VAT charges that could affect clients booking charters in the South of France this coming summer.

Both Fraser Yachts Worldwide and YPI Group have issued recent newsletters and online articles about the current confusion that is surrounding bookings in French national waters, where the charter season will open in about five months’ time.

The VAT in France is supposed to be 19.6 percent, but for the past couple of years, French officials have ignored requests from the European Union to apply that charge to yacht charter vacations, according to YPI Group. Other nations in the European Union, including neighboring Italy, charge VAT on yacht charters. On November 21, officials in Brussels, Belgium, demanded that France explain why it is failing to fall into line with other members of the union.

YPI Group is telling its clients that some kind of VAT charge is “probably imminent” for charters going forward, though negotiations are continuing about what percentage it might be and to which charters it might be applied.

Fraser Yachts is saying that it sees no indication of VAT being charged for 2013 charters, but it is leaving the door open to that possibility by adding: “The market is adapting to the changing situation.”

Suffice it to say that anyone booking a yacht charter vacation in France this summer should be aware that VAT might be charged at a substantial rate, making the cost of a charter in that region as much as one-fifth more expensive than the currently quoted weekly base rate.

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