France Eliminates VAT for Superyachts from Martinique and Guadalupe: Superyachts chartered from Martinque and Guadalupe that are more than 24 meters long and less than 3,000GT no longer have to pay VAT in French waters thanks to legislation recently passed by the French government.
The law now applied to Martinique- and Guadalupe-registered yachts is similar to that applied to short-term charters previous to the Bacino Charter Case in 2010 when the French government introduced 20% taxation with a possible reduction to 10% when traveling outside of European Union territorial waters. In that case, the EU ruled that charter exemption cannot apply to yachts used for recreation, even if they are registered as a commercial vessel.
The Bacino case, however, is based on an interpretation of the VAT Directive, which does not apply to France’s overseas territories, of which Martinique and Guadalupe are a part. The new exemption was introduced by the French government as part of its 2019 finance law. It helps re-establish a level playing field with regard to the hiring of pleasure vessels in other neighboring countries that do not taxed hired yachts.
The exemption will also greatly simplify superyacht charter operations from Martinique and Guadalupe as those to locations have been considered problem spots for the charter market.
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