What does it mean for commercial yachts?

Transcription

1 Understanding the Bulletin Officiel des Finances Publiques-Impôts (BOFIP) What does it mean for commercial yachts? 6/5/2015 1

2 What does BOFIP say? It clarifies the criteria commercial yachts must meet to enjoy VAT exemption on the supply of goods/services purchased in France. Although it deals with VAT, the Bulletin does not affect the VAT due on charter fees. VAT regulations in place for charter in France are the same as before. 6/5/2015 2

3 What are the criteria? To benefit from VAT exemption, commercial yachts must comply with the following: The yacht must be registered as commercial The yacht owning company must employ permanent crew on board The yacht must be used exclusively for commercial purposes, i.e. under a charter agreement And the 2015 criteria: 70% of cruising trips must be outside French waters. 6/5/2015 3

4 What is a trip? Every time a guest disembarks or embarks a new trip is generated. Embark or disembark means to join or to leave the charter for good. In one charter you can have more than one trip (each generated by the embarkation or disembarkation of guest/s). Static charters do not count towards generating trips. Of the total number of charters carried out in any year static charter must be less than 50%. 6/5/2015 4

5 What trips qualify? Qualifying trips: The yacht sails from: French waters to international and/or foreign waters foreign waters to international and/or foreign waters Non-qualifying trip : The yacht does not exit French territorial waters The yacht s logbook and guest lists must be accurately maintained to reflect the exact itinerary and changes in guests. 6/5/2015 5

6 When do the provisions of BOFIP come into effect? In The 2015 cruising trips provide the basis for the 2016 assessment and only yachts that meet the conditions in 2015 will be granted an exemption for In the same way the 2016 itineraries will be the basis for 2017, 2017 for 2018 and so on. The exemption lasts for one calendar year (Jan 1-Dec 31) and is renewed on a yearly basis. 6/5/2015 6

7 What happens if a yacht doesn t qualify for the exemption? If one of the above conditions is not met, the yacht will have to pay VAT on the purchase of good and services. However, the VAT paid by the yacht will be reimbursed when the VAT declaration is filed by the VAT representative. 6/5/2015 7

8 The slides below show the 2015 summer season of a called MY Sushi carrying 12 guests. 62m yacht Each slide shows: the number of trips the itinerary which parties embark/disembark the cruising waters* Will M/Y Sushi retain her exemption? * Trips in French waters are highlighted in yellow 6/5/2015 8

9 Charter 1 - June 21-28, 2015 Itinerary: St Tropez, Corsica, Portofino Charter party: 12 Trip Itinerary Charter party Waters Does the trip qualify for the exemption? 1 St Tropez /Cannes All 12 guest onboard French No 2 Cannes/ St Florent/Calvi/ Bonifacio 2 guests disembark and 2 new guests embarks in Cannes International 3 Bonifacio/ Portofino 2 guests disembark and 2 new guests embarks in Bonifacio International 6/5/2015 9

10 Charter 3 - July 18-25, 2015 Itinerary: St Tropez Porto Cervo Charter party: 12 Trip Itinerary Charter party Waters Does the trip qualify for the exemption? 1 St Tropez/Bonifacio All 12 guests onboard International 2 Bonifacio/Porto Cervo 2 guests disembark and 2 guests embark in Bonifacio on day 3 EU 3 Porto Cervo*/Porto Cervo 2 guests disembark in Porto Cervo on day 5 International * Went whale watching for the day beyond 12nm 6/5/

11 Charter 4 - August , 2015 Itinerary: St Tropez - Ibiza Charter party: 12 Trip Itinerary Charter party Waters 1 St Tropez/ Porquerolles/St Tropez 2 guests disembark in St Tropez on day 2 French Does the trip qualify for the exemption? No 2 St Tropez/Menorca Only 10 guests on board International 3 Menorca/Ibiza 2 new guests embark in Menorca EU 6/5/

12 Charter 5 August 18-25, 2015 Itinerary: Porto Cervo, Naples Charter party: 12 Tri p 1 Itinerary Charter party Waters Porto Cervo/ Asinara/Cavallo /Porto Cervo All 12 guests on board, 2 guests disembark on day 3 in Porto Cervo EU Does the trip qualify for the exemption? 2 Porto Cervo /Ischia Yacht cruises to Capri with 10 guests on board International 3 Ischia/Capri 2 guests embark in Capri on day 5 EU 4 Capri/Naples 2 guests disembark in Capri on day 6 EU 6/5/

13 How does it pan out? Number of charters in Number of trips in Trips qualifying for exemption in France 11 Trips not qualifying for exemption in France 2 M/Y Sushi qualifies for the exemption since over 84% of trips were outside French waters. She meets the requirements of the 70% rule. 6/5/

14 For more information and guidance on how to retain the commercial exemption contact: Thibault Hermant SOS Yachting France info.france@sosyachting.com 6/5/