A non-retroactive law for vessels financed before 6 November 2020
Beyond the surprise, relative to the fact that the problem has been known for many months and years, the retroactivity of the text amending the VAT arrangements applicable to boats purchased on lease or LOA, lease with purchase option, had crystallized the anger of the industry. The Direction de la Législation Fiscale (DLF), finally made several clarifications on the application of the text. In particular, it went back to the retroactivity which provided for the application of the standard VAT rate of 20% for all contracts concluded as of 1 November, whereas the text was published on 6 November. The institution specifies the conditions of application:
the old VAT arrangements continue to apply to contracts concluded before 6 November. Purchasers benefit from the flat-rate VAT allowance of 50%.
For contracts signed at the latest on 30 November 2020 for which a purchase order was already signed on 6 November 2020, the flat-rate VAT reduction of 50% also applies.
A possible VAT reduction for yachtsmen actually sailing outside France
The allocation of the 50% VAT reduction was based on the theoretical navigation of vessels outside the 12-mile limit of French territorial waters for 50% of the year. Yachtsmen and owners of rental boats will still be able to claim a VAT reduction in proportion to the time spent outside national waters. They will have to be able to justify this with documents, for example AIS data, a rental contract, logbook, or any other proof.
The Fédération des Industries Nautiques says it will continue to negotiate with the institutions for a deferral to January 1, 2021.
