Given the health crisis linked to the Covid-19 and the limited chartering opportunities in 2020, the French Tax Authorities stated that, in 2020, for yachts that have not been able to operate commercially (charters or transport contracts) as well as for yachts that have been operated commercially in 2020 and did not comply with the 70% rule, the following would apply:
- the year 2020 will not be taken into consideration to assess the conditions of the 70% rule;
- in 2021, these yachts will need to fill out a provisional commercial activity statement to keep the benefit of the French Commercial Exemption alive.
The provisional commercial activity statement entails a stringent obligation to comply with the 70% rule before the end of the concerned year. In the present case, it means that these yachts filing a provisional commercial activity statement in 2021 will need to be compliant with the 70% rule before December 31st, 2021. Otherwise, the VAT will be potentially readjusted on the value of the yacht and on the goods and services purchased within the scope of her commercial activity (this VAT can be offset as for any operating business).
Please contact our French office info.france@sosyachting.com for further information or guidance.
