VAT exemptions in 2021

Yacht operators can benefit from French Commercial Exemption (FCE) in 2021 even if they have been unable to make the necessary trips usually required to qualify. The Covid-19 pandemic has meant many vessels have not been able to meet the qualifying requirements of 70% navigation outside French waters. However, a relaxation of the rules means operators may still qualify for 2021.

To benefit from the VAT exemption in 2021, commercial vessel operators will be able to provide their suppliers with a provisional certificate drawn up under their own responsibility which certifies the vessel will meet the conditions provided for in article 262 II CGI and that they undertake to pay the taxes if these conditions are not met.

If the conditions are not met during the year 2021, a VAT adjustment will have to be made on the operations during the declaration of March 2022. This currently applies to EU flagged commercial vessels that have not been able to sail this year. Non-EU flagged commercial vessel operators in a similar situation must make inquiries to the Customs Administration, which decides on a ship-by-ship basis.

For more guidance and advice, contact the team at Affinity Group at infor@affinityco.com